4 - Sustainability Disclosure Database

Transcription

2012
REGISTRATION
DOCUMENT
ANNUAL
FINANCIAL REPORT
TABLE OF CONTENTS
Profile
Message from the Chairman and Chief Executive
1
5.8
PRESENTATION OF THE TF1 GROUP
1.1
1.2
1.3
1.4
1.5
1.6
2
2.2
2.3
2.4
3.4
AFR
2012 market trends
2012 activity and results
Available information in other part
of the registration document
Statement of company operations
over the last five business years
2012 FINANCIAL STATEMENTS
4.1
4.2
4.3
4.4
5
Composition of the Board of Directors
and Board Committees
Chairman’s report
Report on remuneration
Risk factors
MANAGEMENT REPORT
OF THE BOARD OF DIRECTORS
3.1
3.2
3.3
4
The management team
Simplified organisation chart as at 19/02/2013
Group activities
2012 key events
Group indicators
Research and development expenditure
REPORT OF THE CHAIRMAN
ON CORPORATE GOVERNANCE
2.1
3
2
3
AFR
Consolidated financial statements
Notes to the consolidated financial statements
Parent company financial statements
Notes to the parent company
financial statements
STATUTORY AUDITORS
AND INDEPENDENT VERIFIER’S REPORTS
5.1
5.2
5.3
5.4
5.5
5.6
5.7
Statutory Auditors’ Report on the Report
by the Chairman of the Board
Statutory Auditors’ Report on the Consolidated
Financial Statements
Statutory Auditors’ Report on the Financial
Statements
Statutory Auditors’ Special report on regulated
agreements and commitments
Statutory Auditors’ report on the capital
reduction
Statutory Auditors’ report on the capital
increase reserved for members of an employee
savings scheme
Statutory Auditors’ report on the issuance
labeltransparence.com
5
6
7
8
14
17
21
6
23
7
24
33
55
62
71
73
85
6.1
6.2
6.3
6.4
6.5
202
211
214
222
225
227
7.1
7.2
7.3
7.4
7.5
7.6
228
233
237
241
251
8.2
8.3
101
8.4
9.1
183
9.2
9.3
9.4
9.5
186
188
194
9.6
9.7
9.8
9.9
269
278
283
Taking part in the Combined General Meeting
of April 18, 2013
284
Agenda
287
Report of the Board of Directors on the resolutions
submitted to the Combined General Meeting
and statement of the reasons for the resolutions 289
Presentation of the draft resolutions
296
ADDITIONNAL INFORMATION
166
185
The CSR approach and reporting
Governance and business ethics
Dialogue with stakeholders
Issues related to content
Talent and working environment
Sustainable development in products
and activities
Responsible Purchasing
GENERAL MEETING
99
184
Information about TF1
Legal environment
Capital
Ownership structure
Stock market information
CORPORATE SOCIAL RESPONSIBILITY
8.1
9
198
201
99
102
108
162
196
INFORMATION ABOUT THE COMPANY
AND ITS CAPITAL
7.7
8
of shares and other securities with
or without preferential subscription rights
Independent verifier’s attestation
and assurance report on social,
environmental and societal information
Person responsible for the registration document
and information concerning the verification
of the accounts AFR
Relations with shareholders
2013 diary dates
Information included by reference
Addresses of main subsidiaries
and participations
Registration document and cross-reference table
Management report of the board of directors
and cross-reference table AFR
Cross-reference table with GRI G3
Table showing correspondence with
Decree n°2012-557 dated April 24, 2012
(Article 225 of the Grenelle 2 act)
195
This label recognizes the most transparent Registration Documents according
to the criteria of the Annual Transparency Ranking.
The element of the annual financial report are clearly identifed in the table of content using the pictogram AFR
307
308
310
311
311
312
313
315
316
318
REGISTRATION
DOCUMENT 2012
AND ANNUAL FINANCIAL REPORT
The French version of the Annual Report was filed by the “Autorité des Marchés Financiers” (AMF – French stock exchange
commission) on March 13, 2013, in accordance with the article 212-13 of the General Regulation of the AMF.
This document may not be used to support a financial operation unless it is accompanied by an operation note certified
by the AMF. It was prepared by the issuer and is the responsibility of the person whose signature appears therein. The
registration in accordance with the provisions of Article L. 621-8-1-I of the French Monetary and Financial Code, was made
after that the AMF has verified that the document is complete and understandable and that the information it contains is
consistent. It does not authenticate by AMF of the accounting and financial information. In case of discrepancy, the French
version prevails.
REGISTRATION DOCUMENT 2012
1
Profile
PROFILE
leading mainstream television channel. It is also an integrated
media group that has built up a range of activities in high-growth segments alongside its
core business. Its corporate mission is to inform and entertain.
TF1 is France’s
In freeview television, the Group is present with four free-to-air
channels:
The TF1 group’s activities now span the entire value chain in the
broadcasting industry:
p TF1, the channel for major events, ranked no. 1 in France;
p upstream in:
p TMC, the leading digital terrestrial channel and fifth nationwide;
− audiovisual and film production,
p NT1, the young-adults channel that confirmed its momentum in 2012;
− the acquisition and trading of audiovisual rights,
p HD1, the Group’s new digital terrestrial television channel launched
on 12 December 2012 and focused on all forms of storytelling (film,
drama, comedy, etc.).
− movie distribution;
It is also present in pay TV, with:
p Eurosport, the leading pan-European sports broadcasting platform,
received by 132 million households and available in 20 languages in
54 countries;
p TV Breizh, the no. 1 cable/satellite channel;
p the Discovery Division (Ushuaïa TV, Histoire, Stylía), which sets the
standard for multi-channel offerings in France;
p LCI, a news and current event analysis channel;
p TF6 and Série Club, owned 50% with M6.
Since 1987, when it was privatised and became part of the Bouygues
Group, TF1 has created new, high value-added activities in its main
business of producing and broadcasting TV programmes.
p downstream in:
− the sale of commercials,
− DVD and music CD publishing.
TF1 has also created a broad range of merchandising spin-offs from
its main channel, covering home shopping and e-commerce, catch-up
TV and video-on-demand content, licences, musicals and board games.
The TF1 group is also active in the free press sector, with the free
newspaper Metro.
TF1 formed a strategic alliance with Discovery Communications in
December 2012 aimed at strengthening the activities of the Group in pay
TV and in content publication.
Harnessing the growth of the Internet and new technologies, TF1
produces, develops and publishes new interactive content and
services for the Web, smartphones, tablets, internet TV and free press.
In 2012 TF1 was voted the TV channel with the best digital footprint*,
thanks to the power of its MYTF1 brand, its cross-cutting digital
approach and its ability to bring together a community of over 15 million
fans.
Going forward, the TF1 group’s strategy will be to combine the broad
and effective reach of mass media with the closeness of digital media,
offering compelling content and seizing opportunities to reach audiences
everywhere thanks to the onward march of technology.
*
2
NPA Social Media Awards prize.
Message from the Chairman and Chief Executive
MESSAGE FROM THE CHAIRMAN AND CHIEF EXECUTIVE
Looking further
Ladies and Gentlemen, Dear Shareholders,
Two observations can be made about 2012.
The first is not new. The advertising market failed to improve last year,
in line with the overall economic trend. Caution, then, is the keyword
in 2013, given that the offer continues to fragment and the economic
outlook remains uncertain.
The second observation concerns our achievements. TF1 group
channels and the other activities put in strong performances. We
showed daring in our programmes, products and services, which met
with emphatic success. We improved our processes, revamped our
organisation structures and strengthened our expertise. And we set in
motion the second phase in our optimisation plan with determination,
the success of which will play a decisive role in Group development
going forward.
These efforts were reflected in robust financial results in 2012. Group
revenues held steady, as did current operating profit.
We have shown that our teams are talented and know how to manage
tight budgets with no detriment to quality, and also that the risks we
have taken are paying off.
This should make us feel confident about the future.
HD1 stands as a symbol in this respect. In a few months we started
broadcasting a fresh and innovative channel that takes the number of
the Group’s free-to-air channels to four. We have come a long way since
2007, when TF1 competed alone against 18 rival channels!
Another promising move came with the signature on 21 December 2012
of a strategic alliance with Discovery. That this television giant should
approach us to form a long-term partnership demonstrates the highly
positive light in which international players see our Group. This is a major
agreement that brings new development prospects to Eurosport, our
pay theme channels and TF1 Production.
To address today’s lacklustre economy, we have to harness the
commitment of our employees, our powers of innovation and execution,
our rigour and our expertise to continue developing our activity portfolio.
But we need to look further. We are backed by shareholders who trust
us, and I would like to thank them. Our accomplishments over the last
five years in television, digital technology and diversification provide
the TF1 group with all the strengths it needs to face the future with
confidence.
The uncertainties of the day must never make us forget that.
Boulogne-Billancourt, February 19, 2013
Nonce Paolini, Chairman and Chief Executive Officer of TF1
3
4
DOCUMENT DE RÉFÉRENCE 2012
1
1.1
1.2
1.3
THE MANAGEMENT TEAM
6
Executive Committee, TF1 group
6
Senior Management Committee, TF1 group
6
SIMPLIFIED ORGANISATION
CHART AS AT 19/02/2013
7
GROUP ACTIVITIES
8
1.3.1
Broadcasting in France
8
1.3.2
Audiovisual rights
1.3.3
1.3.4
1.4
2012 KEY EVENTS
14
1.5
GROUP INDICATORS
17
1.5.1
Management Indicators
17
1.5.2
Key financial figures
18
1.5.3
Key trading figures
20
1.6
RESEARCH AND DEVELOPMENT
EXPENDITURE
21
12
R&D expenditure on programmes
21
International broadcasting
12
Real Estate
13
R&D expenditure on technological
innovation projects
21
In-house software development
22
5
1
The management team
1.1 THE MANAGEMENT TEAM
February 2013
Executive Committee, TF1 group
Nonce Paolini, Chairman and Chief Executive, TF1 group
Arnaud Bosom, Executive Vice President, Human Relations and Organisation
Jean-Michel Counillon, General Counsel
Philippe Denery, Executive Vice President, Group Purchasing and Finance
Martine Hollinger, Chairman of TF1 Publicité
Jean-François Lancelier, Chief Executive, Broadcasting, Programmes and Production, TF1 group
Catherine Nayl, Executive Vice President, News and Information, TF1 group
Régis Ravanas, Executive Vice President, Diversifications (Chairman of TF1 Entreprises, Téléshopping, e-TF1 and TF1 Vidéo)
Senior Management Committee, TF1 group
The TF1 group Senior Management Committee is composed of the Executive Committee members and the following senior managers:
Philippe Balland, Vice President, Advisor to the Executive Vice President, Broadcasting, Programmes and Production, TF1 group, and Chairman of TF1
Production
Édouard Boccon-Gibod, Chairman of Metro France
Frédéric Ivernel, Executive Vice President, Communication and Marketing
Laurent-Éric Le Lay, Chairman and Chief Executive, Eurosport; Managing Director for Sports Rights Purchasing
Benoît Louvet, Executive Vice President, Acquisition and Negotiation of Audiovisual Rights, Chairman of TF1 Droits Audiovisuels and TF1 Films
Production
Gilles Maugars, Executive Vice President, Technologies, Information Systems, Internal Resources and Corporate Social Responsibility
Jean-Pierre Paoli, Managing Director, International Affairs and Development
Éric Revel, Chief Executive of LCI
Laurent Solly, Chief Executive of TF1 Publicité
6
1
Simplified organisation chart as at 19/02/2013
1.2 SIMPLIFIED ORGANISATION CHART AS AT 19/02/2013
SEGMENT
MAIN SUBSIDIARIES
100%
100%
ALSTOM
29.4%
100%
BOUYGUES TELECOM
100%
90.5%
BOUYGUES SA
43.7%
100%
100%
96.6%
COLAS
80%
100%
BOUYGUES IMMOBILIER
100%
BOUYGUES CONSTRUCTION
T
80%
E
100%
L
100%
100%
E
TF1 PUBLICITÉ (1987)
SNC APHELIE (1992)
FIRELIE(1) (2011)
TF1 ENTREPRISES (1989)
LA CHAINE INFO - LCI (1994)
OUEST INFO (2002)
100%
DUJARDIN (2007)
100%
UNE MUSIQUE (1988)
100%
TV BREIZH (2000)
100%
USHUAÏA TV (2004)
100%
STYLÍA (1996)
100%
HISTOIRE (2004)
PREFAS 18 (2012)
(4)
EUROSPORT FRANCE (1993)
HD1 (2012)
TF1 THEMATIQUES (2000)
50%
TF6 (2000)
50%
EXTENSION TV - SÉRIE CLUB (2001)
TF1 DISTRIBUTION (2010)
TMC RÉGIE (2006)
V
50%
I
S
Broadcasting
France
I
100%
49%
MONTE CARLO PARTICIPATION (2005)
TMC (2005)
50%
H.O.P Holding Oméga Participations (2007)
(ex Groupe AB)
100%
WB TV SA Belgique (2001)
100%
O
100%
N
100%
TÉLÉSHOPPING (1987)
PUBLICATIONS METRO FRANCE (2003)
F
100%
R
100%
A
100%
N
100%
Ç
100%
A
100%
ONECAST (2006)
I
100%
GIE TF1 ACQUISITION DE DROITS (2007)
S
33.5%
GROUPE AB (2010)
E
100%
Audiovisual
rights
100%
50%
International
broadcasting
80%
Other activites
100%
NT1 (2010)
TOP SHOPPING (2005)
80%
PLACE DES TENDANCES (2007)
48%
DIRECT OPTIC (2012)
49%
SYLVER (2002)
66%
TF1 INTERNATIONAL (2009)
34%
UGC DISTRIBUTION (2009)
e-TF1 (1999)
WAT (2006)
TF1 DS (2010)
TF1 PRODUCTION (1995)
TF1 FILMS PRODUCTION (1980)
TF1 VIDÉO(2) (1998)
1
100%
100%
80%
TF1 DROITS AUDIOVISUELS (1993)
CIBY 2000(3) (2002)
A1 INTERNATIONAL INVESTMENT BV (2005)
3%
THE WEINSTEIN COMPANY (2005)
EUROSPORT (1991)
TF1 INSTITUT (2006)
(1) Held by TF1 EXPANSION
(2) Held by TF1 DROITS AUDIOVISUELS
(3) Held by TF1 FILMS PRODUCTION
(4) Held by EUROSPORT
Year of creation and/or acquisition is in brackets
7
1
Group activities
1.3 GROUP ACTIVITIES
The TF1 group is a television company with four free-to-air channels and twelve pay channels. While continuing to build on its core business –
television – with freeview and pay channels, the Group has diversified into many other areas, including the Web, audiovisual rights, production, home
shopping, e-commerce, licences, games and free newspapers. The purpose of the TF1 group is to use all its channels to inform and entertain.
1.3.1 Broadcasting in France
TF1 BROADCASTING
TF1 CHANNEL(1)
In addition, the pay theme channels marketed by TF1 Publicité provide
targeted and qualified communication outlets that strengthen the affinity
of the national offer.
The TF1 channel offers family-oriented, event-based programming
addressing major themes that attract a broad audience, ranging from
news, light entertainment, drama and sports to feature films, youth
programmes, magazines and documentaries. TF1 programmes are
based on unifying and recognisable concepts that are constantly
renewed to meet viewers’ expectations.
In 2012 TF1 Publicité confirmed its success in the radio market by
selling advertising space on the 125 local stations run by the economic
interest grouping, Indés Radios. This offering combines power with local
presence to promote effective advertising and makes TF1 Publicité a
major player in this market(2). TF1 Publicité extended its radio offering
with the arrival of MFM Radio in January 2013.
In 2012, in a highly competitive environment that consisted of 25
freeview channels at the end of the year, TF1 remained the clear leader
in terms of overall ratings, with a 22.7% audience share, and in ratings
for women under 50 purchase decision makers, with a 25.5% share.
TF1 once again demonstrated its dynamic programming approach by
scoring 88 of the year’s top 100 audiences and being the only channel
to rank all programme types in its top 100. TF1 scored the top audience
rating of the year with Le Bal des Enfoirés, which drew 13.3 million
viewers on March 16, 2012.
With Metro France, TF1 Publicité is present in the dynamic free press
segment. Metro was fully redesigned in 2012 with a new layout, print
and format, and distribution was extended to 20 new cities.
TF1 PUBLICITÉ – ADVERTISING
TF1 Publicité is a standard-setter in multi-audiovisual advertising,
drawing on its diverse range of advertising media to bring advertisers
bespoke communications solutions. Innovation remains a core
component in TF1 Publicité strategy, based on new media consumption
behaviour including second screens and multi-tasking.
With the rapid development of all forms of audiovisual technology and
the fragmentation of the offering, the advertising power of TF1 assures
advertisers of maximum exposure of their products with all audiences,
enabling them to rapidly expand brand awareness and sales. By
becoming a sponsor, advertisers can associate their brand with the most
prestigious programmes shown on TF1 and with the values conveyed by
these programmes.
In 2012 TF1 Publicité expanded its freeview television offer with
advertising responsibilities for HD1 (the Group’s fourth freeview channel)
and Numéro 23, two of the six new HD DTT channels. This development
enables TF1 Publicité to achieve a complementary targeting fit with TF1.
(1) Source: Médiamétrie-Médiamat.
(2) Source: 126,000 Radio – Nov/Dec 2012 – Monday-Friday – 5am-midnight – Target: 13+.
8
TF1 implemented its four-screen digital strategy through a single brand,
MYTF1. TF1 Publicité supported its publishers as they rolled out content
for PCs, mobiles, tablets and connected TV (IPTV). TF1 Publicité
established itself as a leading player in video advertising through its
multi-screen offering (based on programmes such as The Mentalist,
House, The Voice, Koh-Lanta and Danse avec les Stars). TF1 Publicité
reinforced its positions in the mobile market with an offering combining
operator portals (Bouygues Telecom) and apps for media brands
(MYTF1, Eurosport, TFou, TF1News).
In 2012 TF1 Publicité launched “La Place Média” with Amaury Médias,
Le Figaro Médias and Lagardère Publicité. This 100% media ad
exchange platform is the leader in the premium category in France in
display inventories.
TF1 Publicité continues to enhance its offering through stronger
presence in the social networks and by taking advantage of the specific
characteristics of each screen. The partnership launched by TF1 with
Shazam in 2012 is part of the advertising check-in approach that fosters
interactivity between viewers and advertising.
To take things further, TF1 Publicité is contributing to the creation of new
synchronised communications opportunities with live programmes and
advertising screens through MYTF1 Connect.
TF1 Publicité designs tailored plurimedia communication systems that
bring different media (including Metro) together around exclusive content
Group activities
or themes, adapted to the objectives of each advertiser and to new
consumer uses. TF1 Publicité also adapts to advertisers’ changing
requirements by forging a link between the media and sales outlets via
TF1 Conso, a large-scale promotion campaign advertised and carried
on the TF1 channel.
And to meet the requirements of the growing number of customers
looking for more creativity and special customised operations, the
TF1 361 Department develops pertinent multimedia communication
solutions combining a number of media for a single theme or exclusive
content, based on the requirements of each advertiser.
e-TF1
The main role of e-TF1 is to develop TF1 group activities across all digital
media.
As part of its multi-screen strategy, e-TF1 handles the digital distribution
of TF1 channel products through the MYTF1 brand. The offer features
an extended range of catch-up programmes available via the web,
smartphones and tablets and included in the TV offers of the main
internet service providers in France.
With more than 1.2 billion premium videos watched in 2012, e-TF1
brings audiences and advertisers a unique and powerful video offering.
1
On December 21, 2012 TF1 and the US group Discovery
Communications signed a major strategic partnership agreement aimed
notably at developing the publishing businesses of pay TV channels in
France. Discovery has taken a 20% share of several TF1 group theme
channels (Eurosport France, TV Breizh, Ushuaïa TV, Histoire and Stylía)
with TF1 now holding an 80% share.
TMC
TMC was France’s fifth-ranked TV channel for the third consecutive
year in 2012. It is the long-standing leader in freeview digital terrestrial
television (DTT) thanks to its unique positioning as a general-interest,
family-oriented entertainment channel with four key offerings: magazines,
French drama, movies and entertainment. TMC was the leading DTT
channel in magazines, cinema and entertainment in 2012. It is also the
first DTT channel to invest in the production of a long-format French
drama show. In 2012 TMC posted a 3.6% audience share of individuals
aged 4 and over, up 3% on 2011.
TMC is owned 20% by the Principality of Monaco and 80% by TF1 since
July 1, 2010.
NT1
e-TF1 is present on the web with theme sites (including the plurielles.fr
women’s focus site and TF1 News, etc.) and a games offer (notably with
TF1 channel-based games), and also through its interactive agency that
develops bespoke internet products.
NT1 is a general-interest freeview DTT channel targeting young adults
with a strong offer of first-air US series, entertaining magazine shows,
film, French drama, and sport. NT1 confirmed its momentum in 2012
by scoring the biggest increase for a general-interest channel, with an
11% year-on-year increase in audience share to 2.1% of the 4-and-over
demographic in 2012.
In addition, e-TF1 manages interactive systems for the TF1 channel
(Audiotel, text messages) in the shape of games and votes.
The NT1 channel has been 100% owned by the Group since July 1,
2010.
WAT is the third-ranked video platform in France, bringing web users a
high-performance content-sharing service.
HD1
Source: Panel vidéo Médiamétrie/NetRatings
THEME CHANNELS IN FRANCE(1)
Drawing on all its television expertise, the TF1 group has developed
a broad offering of complementary and special-interest channels.
Following the launch of Eurosport in 1991 and LCI in 1994, the
Group today operates 15 channels other than TF1: TMC, NT1, HD1,
LCI, TV Breizh, Ushuaïa TV, Histoire, Stylía, TF6, Série Club and the
five Eurosport channels (Eurosport France, Eurosport International,
Eurosport News, Eurosport 2 and Eurosport Asia-Pacific).
The theme channels cover the areas of sport, news, feature films,
entertainment and documentaries. Viewers applaud the high-quality
content of the channels, which form a complementary fit with the
programmes shown on TF1 and provide an extended service in news
and entertainment. The TF1 group now boasts a broad range of
channels able to satisfy the expectations of all audiences and all its
customers, be they subscribers or advertisers.
HD1, launched on December 12, 2012, strengthens the Group’s offer
with a fourth freeview television channel. HD1 is a theme channel
dedicated entirely to French drama and storytelling programming. The
grid includes an ambitious range of films (nearly 250 a year), the best
in French drama (such as Flics and Dolto) and a strong selection of
original and all-new international series (including Pan Am and Gossip
Girl). HD1 will be airing its first in-house productions in 2013, with daily
comedy shows followed by a daily soap opera, once the channel covers
the entire French territory. HD1 is a four-screen channel available on the
web, mobiles and tablets.
EUROSPORT FRANCE
Eurosport France is a general-interest sports channel with mass appeal
and recognised as a leader in its segment. On the strength of diverse
programming and prestigious consultants, Eurosport France had
8.8 million paying subscriber households in 2012.
Making a complementary fit with Eurosport, Eurosport 2, launched in
2005, is the new-generation sports channel.
(1) Source: Médiamétrie – Médiamat or Médiamat’Thématik.
9
1
Group activities
On the leading edge of technology, Eurosport France has been
broadcast in High Definition since 2008.
Since December 21, 2012 Eurosport France has been owned 80% by
the TF1 group and 20% by the US group Discovery Communications.
TV BREIZH
Dedicated to series, drama and film, TV Breizh brings viewers a chance
to unwind with a range of well-known brands. The channel broadcasts
180 movies a year. It is the leading channel in the pay-to-view offer in
France.
TV Breizh has been available through the majority of internet service
providers since January 2012, ensuring extensive coverage across
France in addition to satellite and cable. The channel’s top content is
available in catch-up for subscribers from their main distributors.
Since December 21, 2012 TV Breizh has been owned 80% by the
TF1 group and 20% by the US group Discovery Communications.
LCI
LCI, launched in 1994, is a 24-hour French news channel. It covers
all the main news events live, setting itself apart from the competition
through a strong focus on explanation and analysis. It creates specialedition programmes for major current affairs events featuring its
numerous specialists.
The pace of digital development increased in 2009 with the coming
together of the TF1 and LCI news teams and the launch of TF1 News
(formerly LCI.fr), which became the news website of the TF1 group. With
a dedicated news team, TF1 News proposes its own content as well as
the best of the news from TF1 and LCI through a powerful video offer.
Since 2012 they have been available via the majority of internet service
providers, which alongside satellite and cable brings them extensive
coverage. They propose their top content in catch-up for subscribers
from their main distributors.
Since December 21, 2012 the three channels have been owned 80% by
the TF1 group and 20% by the US group Discovery Communications.
SERIE CLUB
Co-owned 50/50 by TF1 and M6, Serie Club focuses on effective TV
series that are or are set to become leaders. It concentrates on new
programming with series and seasons making their debut broadcasts
in France. The channel is broadcast via CanalSat (satellite and ADSL),
Numéricâble and the main independent networks. Most of the channel’s
programmes are available in multilingual versions.
TF6
At TF6, also co-owned 50/50 by TF1 and M6, the keyword is
entertainment. The channel creates buzz both through its original and
exclusive productions and through its all-new series. TF6 programmes
all share the same promise of helping viewers to take time out from the
world.
TF6 is broadcast in the packages of CanalSat (satellite and ADSL) and
Numéricâble, in the main independent networks, and in the pay-to-view
DTT offers of Canal+ Distribution.
DELIVERY METHODS FOR THE TF1 GROUP’S THEME CHANNELS
IN FRANCE(*)
Freeview
DTT**
In 2010 LCI moved significantly upmarket, overhauling its programme
grid and creating live news segments from strategic locations and
prestige talk shows focused on political and economic news.
Pay
DTT**
CABLE
SATELLITE
ADSL
Freeview channels
DISCOVERY DIVISION
The Discovery Division comprises the TF1 group’s pay-to-view
documentary channels.
Histoire broadcasts history documentaries and cultural debates
examining current events.
Ushuaïa TV explores the planet and takes a close-up look at the
wonders of nature. In 2012 it upgraded its visual identity and reinforced
its offer of programmes on adventure and the peoples of the world. The
channel is also available in High Definition.
Pay channels
Stylía, the lifestyle channel, extended its editorial scope in 2012 with
strong focuses on fashion, decoration and gastronomy.
The three channels lead an active production policy, especially regarding
magazines.
* Of the16 channels owned by the TF1 group, 13 are broadcast in France
** DTT: digital terrestrial television
(*) Of the16 channels owned by the TF1 group, 13 are broadcast in France.
(**) DTT: digital terrestrial television.
10
MOBILE
Group activities
SUMMARY OF ADDITIONAL SERVICES OFFERED BY THE
TF1 GROUP’S THEME CHANNELS IN FRANCE
Website
Catch-up
www.mytf1.fr
1
p the Sports Department produces sporting events for which TF1 holds
the rights as well as sports round-ups aired on Sundays, such as
Automoto and Téléfoot;
Social
Networks
www.mytf1vod.fr/
p the Short Format and Trailer Department manages the production
of all the trailers for the TF1 channel and HD1, designs and shoots
adverts, and oversees promotional operations, billboards and short
programmes for television (Du Côté de chez Vous), and for the web
(Yves Rocher).
http://www.eurosportplayer.fr/
The subsidiary also implements production processes that meet the
quality requirements of Group channels while optimising costs. Equipped
with an international monitoring and development unit, the company,
relying on its editorial teams, contributes to the Group’s content and
brand management strategy by acquiring and developing formats (Coup
de foudre au prochain village, Splash, Le grand plongeon, etc.).
VOD or SVOD
Smartphone
www.tmc.tv
www.nt1.tv
www.hd1.fr
www.eurosport.fr
www.tvbreizh.fr
http://lci.tf1.fr/
www.stylia.fr
www.ushuaiatv.fr
www.histoire.fr
TÉLÉSHOPPING
Téléshopping is a leading home shopping player in France. The
subsidiary pursues its two main activities – telesales and e-commerce –
through programmes broadcast on TF1, catalogues and sales websites,
notably www.placedestendances.com (Place des Tendances).
www.serieclub.fr
www.tf6.fr
In parallel, Téléshopping owns shops and operates an infomercial activity
under the Euroshopping brand on a number of freeview DTT, cable and
satellite channels (RTL9, NT1, TMC, Direct 8, Eurosport, etc.).
PRODUCTION
TF1 FILMS PRODUCTION
TF1 Films Production co-produces and buys feature films. It acquires
broadcasting rights for the TF1 channel as well as co-producer shares,
through which it is entitled to a share of the income generated by the films.
Through these investments, TF1 is honouring its commitment to
dedicate 3.2% of advertising income to co-producing European films, of
which 2.5% for works produced in French.
TF1 PRODUCTION
TF1 Production covers the Group’s internal production activities, TF1
Production covers the Group’s internal production activities, excluding
television news and programmes. The subsidiary is made up of a number
of specialist departments, each headed by experienced producers:
TF1 ENTREPRISES
TF1 Entreprises is a diversification and development subsidiary that
operates as a brand publisher and agent. It has four main businesses:
p TF1 Musique produces or coproduces recording projects (Les
Prêtres, Les Stentors, Zaz, Nolwenn Leroy, original soundtrack
from the film The Intouchables, etc.) and blockbuster shows (1789,
Mozart,l’Opéra Rock, the Tutankhamun exhibition, etc.). It also
manages numerous partnerships (Céline Dion, Patrick Bruel, Johnny
Hallyday, Coldplay, etc.) and designs and distributes merchandising
spin-offs linked to shows and events. Une Musique, a subsidiary
of TF1 Entreprises, publishes and produces music for television
programmes and feature films;
p the Magazines Department produces magazine programmes (50mn
Inside, Appels d’urgence, Confessions Intimes, 90’ Enquêtes, etc.) for
the Group’s channels;
p TF1 Games/Dujardin, France’s number-one board game producer,
develops games based on TV programmes (Money Drop, La Roue de
la Fortune, Les 12 coups de midi, Qui Veut Gagner des Millions, etc.)
together with the Mille Bornes and Le Cochon qui rit ranges. It has
more than 200 games in its catalogue;
p the Entertainment, Games and Reality TV Department is responsible
for entertainment programming (NRJ Music Awards, Danse avec
les Stars, Après le 20h c’est Canteloup, etc.) and real-TV (Bachelor,
Coup de foudre au prochain village, etc.)
p TF1 Publishing publishes product-and-book or DVD sets sold at
newsagents and by subscription. The first launch was the Tintin
figurine collection in 2011, followed by the Barbapapa collection in
2012;
p the Drama and Animation Department develops and produces
standalone dramas and series (RIS, police scientifique, Crossing
Lines), and animation programmes (Mini Ninjas);
p TF1 Licences sells brand licences (Ushuaïa, MasterChef, Koh Lanta,
Barbapapa, Babar, Hello Kitty, etc.) to manufacturers and seeks to
optimise the development of the properties it manages.
11
1
Group activities
METRO FRANCE
Metro is the second-ranked national daily in France. Available in 36 large
towns, the newspaper reaches 2,923,000 young professional and urban
readers every day. Metro is also available on the Internet, mobile apps
and tablets. A total 8.7 million people use a Metro media every month.
Metro France has been owned 100% by TF1 since July 28, 2011.
Sources: ONE 2011/2012, LNM 15+ Brand Regular.
1.3.2 Audiovisual rights
TF1 DROITS AUDIOVISUELS
Founded in 1995, the subsidiary TF1 Droits Audiovisuels acquires and
distributes audiovisual rights in France and other countries. Its subsidiary,
TF1 International, 34% owned by UGC Images, is one of France’s main
sellers of international rights. It is present in all the main marketplaces,
including Los Angeles, Cannes, Berlin, Venice and Toronto, etc.
In France, TF1 Droits Audiovisuels is a distributor of films for the cinema,
through its 34% stake in UGC Distribution.
TF1 Droits Audiovisuels has a substantial portfolio of audiovisual rights,
which it markets through its catalogue of films and TV drama as part of
second-cycle sales.
TF1 VIDÉO
TF1 Vidéo, created in 1989, is the video publishing subsidiary of the
TF1 group. With an editorial line focused on event-based content and
strong brands, TF1 Vidéo works successfully across all genres, from
French and international cinema to the biggest comedy stars, youth
programming and TV series.
TF1 Vidéo demonstrated its ability to innovate and anticipate new
consumer uses by creating its video-on-demand service, MYTF1VOD, in
2005. MYTF1VOD today is the most distributed VOD service in France,
available across all IPTV services, on the web with www.mytf1vod.fr,
and on Samsung connected TVs and the VOD portals of the Playstation
and X-Box game consoles. With an emphasis on innovation and
new uses, MYTF1VOD, a pioneer in digital copy and social VOD via
Facebook, continuously enhances the consumer experience from basic
streaming through to definitive multi-screen downloads. MYTF1VOD
boasts a catalogue of over 4,000 programmes, comprising the
biggest movies, top series, major comedy events, youth programmes
and documentaries. It also created the “Premium VOD” concept with
“En Direct des USA”, consisting of broadcasts of the leading US series
the day after their debut in the United States.
Harnessing its singular expertise in multimedia publishing, TF1 Vidéo
organised major simultaneous physical and digital launches in 2012,
including the films The Intouchables and Polisse, and Florence Foresti’s
comedy show, Foresti Party.
1.3.3 International broadcasting
EUROSPORT INTERNATIONAL
The Eurosport group is the number one in sports entertainment in
Europe.
The leading pan-European television channel, Eurosport is available in
25 languages and received in 132 million households in 54 European
countries. Eurosport HD is the High Definition simulcast of Eurosport.
Eurosport 2 programmes are available in 18 languages and broadcast
in 63 million households across 47 countries. Eurosport 2 HD was
launched in August 2009.
Eurosport Asia-Pacific covers 17 countries in the region and launched a
HD channel in September 2011. Subscriber numbers increased 16.8%
year on year to 5.8 million.
Eurosportnews is a sports news channel airing worldwide.
12
Eurosport.com, Europe’s leading online sports platform, attracts
22 million unique visitors a month through an international network of
sports websites in 11 languages, including the co-branded Yahoo! sites
in Germany, Spain, Italy and the UK. Eurosport.com free mobile apps
exist in ten languages.
Eurosport Player, Eurosport’s web TV service, broadcasts live sports
content on demand via the computers of web users in 52 countries. The
mobile player app is available in 34 countries.
The Eurosport Events subsidiary manages and promotes international
sports events.
TF1 and Discovery Communications signed a major strategic partnership
agreement on December 21, 2012 aimed at developing Eurosport
business internationally. Under the agreement, Discovery has acquired
a 20% share in Eurosport International, with TF1 now holding an 80%
share.
Group activities
1
1.3.4 Real Estate
The TF1 group mainly operates in several buildings listed below. TF1 owns two of them for 35,167 Sqm located in Boulogne-Billancourt.
Main buildings
TF1
EUROSPORT
Localisation
Surface area
Environmental label
Owned by TF1
1, quai du point du jour, 92100 Boulogne-Billancourt
27,852 Sqm
Ns
Yes
54, avenue de la voie lactée, 92100 Boulogne-Billancourt
7,315 Sqm
Ns
Yes
6, place Abel Gance, 92100 Boulogne-Billancourt
20,220 Sqm
Ns
No
4, quai du point du jour, 92100 Boulogne-Billancourt
6,451 Sqm
HQE EXPLOITATION
No
3, rue Gaston et René Caudron, 92130 Issy-les-Moulineaux
10,593 Sqm
Ns
No
13
1
2012 key events
1.4 2012 KEY EVENTS
JANUARY
January 10, 2012:
TF1 files three bids with the CSA (French audiovisual regulator) in
response to the call for tenders relating to the award of six new
frequencies.
January 10, 2012:
the TF1 group signs the “Good Practices Charter governing the quality
of customer/supplier relations”. A total of 235 large French companies
have now signed up to the Charter, demonstrating a commitment to
ethical purchasing and to fair dealing with suppliers.
January 17, 2012:
Metro France unveils the new foundations for expansion: a fresh layout,
broader geographical reach, new applications, and news reorganisation.
February 24, 2012:
films co-produced by TF1 group subsidiaries receive 9 awards at the
37th annual César ceremony.
February 25, 2012:
9.3 million people watch the launch of The Voice, TF1’s new music show.
MARCH
March 13, 2012:
TV Breizh attracts its biggest audience share among people aged 4 and
over since its launch(1) and confirms its status as the no 1 pay-TV channel
among “women aged under 50 purchase decision-makers”(2) with 1.5%
and 1.7% audience shares respectively.
January 18, 2012:
TFou.fr launches its new website.
March 14, 2012:
the TF1 employees elect their representatives on the TF1 SA Board of
Directors, with a turnout of 71%.
January 25, 2012:
TF1 Publicité takes the Best Digital Strategy prize at the 2012
E-Marketing awards, organised by E-Business.
March 16, 2012:
TF1 screens Les Enfoirés and attracts 13.3 million viewers, an all-time
high for this show.
January 31, 2012:
record viewing figures for the Eurosport channel as an average of
373,000 subscribers watch the final of the Australian Open, the highest
rating for a tennis match since Jo-Wilfried Tsonga reached the final of the
Australian Open in 2008.
March 26, 2012:
two teams from TF1 receive “Reporters d’Espoirs” awards, which
recognise news stories that “offer solutions” in various fields: the
economy, the environment, society, solidarity, peace, and humanitarian
efforts.
FEBRUARY
March 27, 2012:
HD1, a new TF1 channel dedicated to creativity in all forms, is one of
six free-to-air channels selected by the CSA for high-definition digital
terrestrial television (DTT).
February 9, 2012:
at the 14th QualiWeb Trophies, organised by the Cocedal Conseil market
research institute, TF1 is awarded first place in the Information and
Media category for the quality of its relations with viewers and web users
via the “TF1&vous” platform.
February 14, 2012:
TMC attracts record audience figures for the screening of Bodyguard,
with over 2 million viewers (7.5% audience share of people aged 4 and
over).
February 20, 2012:
TF1 collects two awards (“Grand Reporter” and “Kids”) at the 17th
annual “Lauriers de la radio et de la télévision” ceremony, which rewards
programmes for their contribution to culture.
February 21, 2012:
TF1 implements a Group-wide agreement to ensure equality of treatment
among all employees.
March 28, 2012:
TF1 launches the TF1 challenge, offering students the opportunity to
devise the TV programmes of tomorrow, across all genres.
March 30, 2012:
the advertising space-selling agencies TF1 Publicité, Amaury Médias,
FigaroMédias and Lagardère Publicité get together to set up France’s
first-ever dedicated private media market place, creating a platform
where unsold space on their websites will be auctioned off in real time.
APRIL
April 4, 2012:
Sur la piste du Marsupilami, a TF1 Films Production co-production, is
released.
(1) Since the Médiamat’Thématik/MédiaCabSat ratings started (2001).
(2) Source: Médiamat’Thématik – wave 22 – pay-TV universe (August 29, 2011 to February 12, 2012).
14
2012 key events
April 11, 2012:
Ecoprod, an initiative co-founded by TF1, is a partner of the first
international festival of corporate films on ecology and sustainable
development, held in Deauville.
April 12, 2012:
TF1 Publicité is chosen to act as advertising airtime sales agent for beIN
SPORT 1, beIN SPORT 2, and their digital offshoots. This move is part
of a commercial strategy that aims to strengthen TF1 Publicité’s sport
offering.
MAY
May 5, 2012(1):
Eurosport remains the best-known sport channel in France with 75%
overall brand recognition, representing an increase of 3 points over 12
months and 9 points over 24 months.
May 12, 2012:
TF1 Entreprises is joint operator of the Tutankhamen Tomb and Treasures
exhibition in Paris.
May 19, 2012:
TF1 Publicité launches “Oz!”, a new visual recognition technology which
allows smartphone or tablet users to tag an advert being screened on
TF1 and simultaneously view extra content about the advertiser on their
device.
TF1 Entreprises launches Recycler.fr, a mobile phone recycling service,
in line with the Group’s commitment to ecological issues.
1
June 9, 2012:
TF1 screens Germany vs. Portugal, its first match in the UEFA Euro 2012
football tournament. In all, TF1 broadcasts nine matches (including the
final on July 1, 2012), attracting an average of 8.3 million viewers, a 34%
market share among individuals aged 4 and over.
JULY
July 5, 2012:
the TF1 group signs an agreement with the CSA relating to the HD1
channel.
July 12, 2012:
TF1 Vidéo and Paramount Home Media Distribution France announce
the signature of an agreement on the commercial distribution of DVDs
and Blu-rayTM products in France. From September 1, 2012, Paramount
Home Media Distribution France will distribute TF1 Vidéo content on
DVD and Blu-rayTM via major supermarket chains, specialist retailers and
e-commerce.
AUGUST
August 23, 2012:
eTF1 signs an exclusive agreement with ProSiebenSat.1 Games to
make the German group’s online games offer available on MYTF1.fr.
SEPTEMBER
May 23, 2012:
Eurosport confirms its status as the leading pan-European multimedia
platform(2), thanks to a dynamic mobile application and solid audience
ratings in Eastern Europe.
September 3, 2012:
the TF1 group and ESSEC Business School announce a 4-year
partnership with the aim of fostering expert debate about media issues
among a broad range of participants (from students and researchers to
teaching staff and decision-makers).
JUNE
September 14, 2012:
the Paris court of first instance orders Dailymotion to pay TF1 €270,000
in damages and legal costs for failing to meet its obligation to withdraw
549 items of illegal content.
June 1, 2012:
launch of The Voice Tour 2012, bringing together the top 8 performers
flom The Voice for a series of 17 unmissable concerts, co-produced by
the Shows Division of TF1 Musique.
June 3, 2012:
TF1 Publicité pioneers the world’s first real-time interactive advertising
experience. By simply clicking on their remote, viewers with an HbbTVcompatible connected TV set were able to access a minisite dedicated
to the advertiser.
OCTOBER
October 23, 2012:
Metro France and the web portal MeltyNetwork, a media group targeting
the 18-30 age bracket, announce the launch of Meltycampus liked by
Metro, a free magazine aimed at students in and around Paris.
June 4, 2012:
Gilles Bouleau takes over as weekday presenter of the flagship evening
news bulletin, Journal de 20h.
TF1 launches Nos chers voisins, a daily sitcom.
(1) Source: Theme channel brand recognition survey conducted by the Institut CSA on a nationwide representative sample of 2,002 individuals aged 15 and over.
(2) Source: 2012 EMS Summer Survey.
15
1
2012 key events
October 25, 2012:
the advertising slots on MFM Radio, which attracts over 4.4 million
listeners a week in France, will be sold by TF1 Publicité starting
January 1, 2013. This further enhances the appeal of Les Indés Radio,
TF1 Publicité’s market-leading offering in the 25-49 age bracket.
November 19, 2012:
TF1 Publicité teams up with Yves Rocher, French no. 1 in natural
cosmetics, to roll out Miss Beauté by Yves Rocher on MYTF1. This firstever brand channel solely devoted to beauty and wellness is accessible
to all the 10.6 million IPTV-enabled households in France.
October 26, 2012:
TF1 Licences clinches a major partnership deal with Sanrio, being
appointed as exclusive agent for the Hello Kitty brand and for the other
Sanrio characters.
DECEMBER
NOVEMBER
November 12, 2012:
following the success of the must-have first edition of Mille Bornes®
scratch-cards, FDJ® renews its partnership with Dujardin, a TF1
Entreprises subsidiary and owner of the Mille Bornes® brand.
November 14, 2012:
the TF1 channel’s flagship evening news bulletin, Le Journal de 20h,
wins 1st prize at the Media Tenor Global TV Awards. This international
prize is awarded for diversity of issues covered and representativeness
of news-makers, in terms of both individuals and social, economic and
political groups.
November 18, 2012:
the TF1 group gears up for the 6th La Semaine pour l’Emploi (Jobs
Week). Since the initiative was launched in 2009, it has helped over
10,000 people find a job.
16
December 12, 2012:
launch of HD1, the TF1 group’s fourth free-to-air channel, on DTT station
20. HD1 offers quality programming in High Definition, available through
four different media. The HD1 schedule is built around the biggest
offering of feature films on free-to-air TV with nearly 250 films a year, plus
French and foreign drama with a high proportion of first runs and a focus
on comedy, featuring series, sitcoms and short programmes.
December 18, 2012:
at the Social Media Awards organised by NPA Conseil, TF1 is named
as the channel with the best digital footprint, and TF1 presenter Nikos
Aliagas as digital personality of the year.
December 21, 2012:
TF1 and the Discovery Communications group announce a strategic
alliance designed to create value in the two groups’ complementary
businesses.
Group indicators
1
1.5 GROUP INDICATORS
1.5.1 Management Indicators
TF1 CHANNEL AUDIENCE SHARE
28.1%
26.7%
26.1%
23.7% 24.5%
24.5%
2010
2011
ADVERTISING MARKET SHARE OF TF1 CHANNEL
AMONG ALL TV
25.5%
22.7% 23.4%
2012
Women under 50, purchase decision maker
40.3%
2010
37.2%
36.5%
2011
2012
Source: gross data Kantar Média-France
Individuals aged 4 and over
Individuals aged 25-49
Source: Médiamétrie Médiamat
NUMBER OF FREE CATCH-UP VIDEOS SEEN ON AVERAGE
PER MONTH
NUMBER OF EMPLOYEES IN THE GROUP (OPEN-ENDED)
(in million)
3,798
3,810
3,680
2010
2011
2012
55
46
38
2010
2011
2012
Source: eStat Streaming TV
17
1
Group indicators
PERFORMANCE OF TF1 GROUP WEBSITE
PROPORTION OF SUB-TITLED PROGRAMMING HOURS
(million of unique visitors)
10.4
100%
100%
2011
2012
95%
6.4
3.7
2.9
1.5
.fr
ou
2010
TF
ew
1N
TF
lle
rie
Plu
Eu
s
r
s.f
T
WA
po
ros
MY
TF
rt.
1.f
fr
r
0.4
Source: Panel NNR Médiamétrie-December 2012
1.5.2 Key financial figures
These key figures are taken from consolidated financial information of TF1.
TURNOVER BY SECTOR
2,622.4
2,619.7
5.5
1.5
364.4
367.9
115.5
142.9
=
PROGRAMMING COSTS OF TF1 CHANNEL
2,620.6
na
+10.4%
129.8
2,134.8
2,084.8
2010
18
1,504.1
-6.7%
2011
905
78
24
935
=
24
Programming costs
(million euros)
International Broadcasting
One-off sport events
Audiovisual Rights
Programming costs excluding
one-off sports events
Broadcasting France
Including TF1 channel
advertising revenue
-2.3%
1,549.8
+3.3%
951
Other activities
406.0
+12.4%
2,109.6
Turnover by sector
(million euros)
+3.4%
873
881
911
2010
2011
2012
1,402.8
2012
Group indicators
CURRENT OPERATING PROFIT
NET RESULT ATTRIBUTABLE TO THE GROUP
1
SHAREHOLDERS’EQUITY ATTRIBUTABLE TO THE GROUP
NET DEBT/NET CASH
-8.8%
+110
1,539
-25.6%
1,575
1,685
+277
230.4
282.9
258.1
228.3
182.7
136.0
236
17
-41
2010
2010*
2011
2012
2010*
2011
2012**
2011
2012
Shareholders’ equity attributable to the Group (€m)
Net cash (+) / Net debt (-) (€m)
Current Operating profit (€m)
Net result attributable to the Group (€m)
* Result includes a net non-current operating income of €82.8m due to the
remasurement of previously-held equity interest in TMC and NT1, reduced by
goodwill impairement.
** Net result attributable to the Group includes €47.7m of non-recurring expense
which consists of the costs incurred on Phase II of the optimisation plan, and
various other adaptation measures introduced during the year.
EARNINGS PER SHARE
-24.4%
Earnings per share
(in €)
1.07
0.86
0.65
2010
2011
2012
19
1
Group indicators
1.5.3 Key trading figures
DIVIDEND PER SHARE
MARKET CAPITALISATION
(in million euros)
=
2,774
0.55€
0.55€
1,864
0.55€
1,591
+2.5 pts
4.5%
4.8%
2010
7.3%
2011
2012
Dividend per share
Yield of the TF1 share*
31/12/10
31/12/11 31/12/2012
*Based on the average market price of TF1
shared on the year.
STOCK OWNERSHIP AS OF 31/12/2012(1)
43.7%
36.5%
Bouygues
Other
19.8%
Other France
of which employees owners: 7.2%
(1) Euroclear estimates at 31/12/2012, including non-identified holders.
SHARE PRICE OF THE TF1 STOCK
Share in €
TF1 Volume
(number of shares)
9,000,000
12
8,000,000
10
7,000,000
8
6,000,000
5,000,000
6
4,000,000
4
3,000,000
2,000,000
2
1,000,000
0
0
Jan. 12
Fev. 12
March 12
April 12
May 12
TF1 closing share price
EURO STOXX® Media rebased in TF1 share price
20
June 12
July. 12
Aug. 12
Sept. 12
Oct. 12
SBF120 rebased in TF1 share price
TF1 Volume
Nov. 12
Dec. 12
1
1.6 RESEARCH AND DEVELOPMENT EXPENDITURE
Research and Development (R&D) activities at TF1 derive mainly from
experimental development. Most R&D expenditure is incurred with
a view to marketing a new product or service, or broadcasting a new
programme.
In parallel, TF1 develops software and systems designed to make gains
in performance.
In 2012 the TF1 group spent a total €5.4 million on R&D.
The new products, services and programmes on which R&D expenditure
was incurred are described below.
R&D expenditure on programmes
Our activities call for substantial investment in creativity and innovation,
both in entertainment and drama programmes and in film production,
the results of which may be uncertain. The creative process involved
in developing new programme concepts includes the following stages:
p buying in a programme format or concept, or screen rights to literary
works;
p sociological research of new programmes with viewers;
p consultancy services;
p location scouting, casting, set design and production of a pilot
episode.
Consequently, R&D expenditure on programmes includes:
p expenditure incurred on new drama and entertainment formats never
previously broadcast in that form on the TF1 channel, whether or not
they are available for broadcast, as recognised in profit or loss for the
period (written off or expensed on transmission);
p the cost of buying screen rights for new concepts that are never
broadcast and are written off during the year.
R&D expenditure on technological innovation projects
The success of the MYTF1 multi-screen digital offering was confirmed
in 2012. Two years after launch, MYTF1 is now identified by 70% of
catch-up users. Some 658 million videos were watched in catch-up
on MYTF1.fr in 2012, up 20.6% year on year, while the MYTF1 app
topped the mark of four million downloads. The MYTF1.fr site counted
8.0 million unique visitors in December 2012, an increase of 1.3% on
December 2011.
MYTF1 also developed its “second screen” offering, by focusing as a
priority on social TV (Twitter accounts, “Tweet Replay”, i-like, Facebook
share and fan page, channel content), and is preparing contextual and
synchronised services (“Connect”) for early 2013.
TF1 Publicité, extremely proactive in the digital sector alongside MYTF1,
has launched check-in, a new technology whereby smartphones
and tablets recognise advertising live and bring TV viewers additional
content on a brand, including through special competitions. Several
synchronised advertising campaigns were organised in 2012 with highly
promising results, using either the MYTF1 app with integrated check-in
or the Shazam audio recognition app as part of an exclusive partnership
signed by TF1 Publicité in September 2012.
Last year also saw trial runs of synchronised services on connected TVs
using the HbbTV standard. These included interactive advertising with
Amaguiz, Cover it Live for the presidential election in France, and voting
(using Internet+ as a means of payment) on the Secret Story show.
MYTF1VOD posted strong growth in 2012 (with a 100% rise in value
in the first nine months) and is focused on extending its multi-screen
offering, with the launch of MYTF1VOD on X-Box in October and
continued work on apps (iOS and Android) and HbbTV connected TV
in early 2013.
Metro France launched a new website format and new apps in early
2012.
The Eurosport group continued its dynamic web activity policy, recording
strong increases for the site and apps (Eurosport.com, Eurosport Player,
Eurosport Live Sport).
In response to the digital revolution, the annual Innovation Days event,
involving all staff, provided an opportunity to review the latest tech trends
and new uses at the beginning of December, and to set out guidelines
on the digital strategy of the TF1 group.
21
1
In-house software development
In 2012 TF1 launched the two-year “Media Factory” plan to modernise
its channel broadcasting tools. The plan consists in grouping the
general-interest and theme channels at head office in Boulogne and
pooling technical services while selecting the highest-performance
technological solutions.
To that end, the technical facility for the new HD1 channel, launched
on December 12, 2012 on DTT, were developed by the broadcasting
services of the TF1 channel, with an upgraded digital file format and
redesigned workflows. The TF1 group also decided to group the
broadcasting of theme channels sent out from Lorient at the same
facility by fostering synergies. The facilities will come online in firsthalf 2013. The use of digital files (pre-broadcast use of cassettes has
been discontinued) is now a reality for the majority of advertising and
has been initiated for previews. Rollout for programmes is planned for
2013. Lastly, a plan to pool the trailers activity at the same unit has
been launched. All these initiatives are unlocking strong synergies and
harmonising decision-making at TF1, HD1, TV Breizh, Ushuaïa, Histoire
and Stylìa, broadcast from Boulogne, and TMC and NT1, from Monaco.
Taking account of new consumption behaviour by TV viewers has given
rise to new developments in the production of catch-up TV files and in
22
solutions for the synchronisation of broadcast flows and for tablets used
as “companion” screens.
A plan concerning inter-site video links and grouped broadcasts has
been implemented to improve productivity, secure transmissions and
equipment, and enhance pooling through the use of an “IP highway”
specific to the TF1 group.
TF1 made the first television-specific shoot in 4K in April 2012 for the
The Voice programme and then filmed sequences for Danse avec les
Stars in November 2012 with a view to increasing understanding of the
various aspects of a technology set for gradual rollout in the coming
years.
TF1 stepped up its policy on introducing mobile apps for laptops,
smartphones and tablets across a range of fields, including Human
Resources, News and Broadcasting, etc.
TF1 pursued its efforts on reducing energy use, by improving the quality
of measures and identifying consumption units with the company
EMBIX and by forging ahead with its policy on controlling the energy
consumption of office equipment.
2
REPORT OF THE CHAIRMAN
ON CORPORATE GOVERNANCE
2.1
COMPOSITION OF THE BOARD
OF DIRECTORS AND BOARD
COMMITTEES
24
2.3.1 Remuneration of executive
and non-executive directors
55
2.1.1 Composition of the Board of Directors
24
2.3.2 Stock options and performance shares
57
2.1.2 Composition of Board Committees
32
2.3.3 Other information concerning
the Executive Director
61
2.4
62
2.2
CHAIRMAN’S REPORT
2.2.1 Chairman’s report on corporate governance
2.2.2 Chairman’s report on internal control
procedures
2.3
REPORT ON REMUNERATION
55
33
33
44
RISK FACTORS
2.4.1 Operational risks
62
2.4.2 Industrial and environmental risks
63
2.4.3 Legal risks
65
2.4.4 Credit and/or counterparty risk
69
2.4.5 Financial risks
69
23
2
REPORT OF THE CHAIRMANOF THE BOARD OF DIRECTORSON CORPORATE GOVERNANCE
Composition of the Board of Directors and Board Committees
2.1 COMPOSITION OF THE BOARD OF DIRECTORS AND BOARD
COMMITTEES
2.1.1 Composition of the Board of Directors
TERMS OF OFFICE AND FUNCTIONS OF THE BOARD MEMBERS AT 19 FEBRUARY 2013
Listed below are the terms of office and functions exercised by the Directors of TF1 in any company, in 2012 and over the past five years.
NONCE PAOLINI Born April 1, 1949 – French citizenship
Nonce Paolini holds a Master of Arts degree and is a graduate of
Sciences Po Paris (1972). He began his career at EDF-GDF, where
he worked first in operational positions (customer relations/sales), and
then in senior management (organisation, training, human resources,
corporate communications). He joined the Bouygues Group in 1988
as Human Resources Development Director, and became the Group
Corporate Communications Director in 1990. He joined TF1 in 1993
as Human Resources Director, and became Deputy CEO of the
TF1 group in 1999. In January 2002 he was appointed Senior Vice
President of Bouygues Telecom in charge of sales and marketing,
customer relations, and human resources. He became Deputy CEO
and Director in April 2005.
Current appointments within the TF1 group
CEO of TF1 since May 22, 2007
2012 – Chairman of TF1 Management and HD1; Representative of
TF1 Management, manager of La Chaîne Info
Chairman and CEO of TF1 since July 31, 2008
Director of TF1 since May 22, 2007
Most recent renewal: April 14, 2011, expiring 2013
Holds 100 shares in TF1
Business address: 1, Quai du Point du Jour – 92100 BoulogneBillancourt
In France: Chairman and Director of TF1 Fondation d’Entreprise
and Monte Carlo Participation; Chairman of HOP-Holding Omega
Participations; Standing Representative of TF1, Director of Groupe AB,
GIE TF1 Acquisitions de Droits, TF6 Gestion and Extension TV
Outside France: Vice Chairman – Director of Télé Monte Carlo (TMC)
(Monaco)
Appointments held outside the TF1 group
In France: Chairman of the Association des Chaînes Privées (ACP);
Director of Bouygues* and Bouygues Telecom
Other appointments held within the last five years
2010 - Chairman of TF1 Publicité; Director of TF1 Thématiques;
Representative of TF1 Management, Manager of TF1 Distribution
2009 - Member and Vice Chairman of the Supervisory Board of France 24;
Representative of TF1, Director of Médiamétrie; Representative of TF1,
Director of WB Télévision (Belgium)
2008 - CEO of TF1; Standing Representative of TF1, member of the Board
of Directors of Monte Carlo Participation, Director of Télé Monte Carlo
PATRICIA BARBIZET Born April 17, 1955 – French citizenship
Patricia Barbizet is a graduate of École International de Commerce
de Paris (ESCP Europe). She is currently the Chief Executive Officer
of Artémis, Vice Chair of PPR and Chair of Christie’s International.
She began her career with the Renault Group as treasurer of
Renault Véhicules Industriels, then Finance Director of Renault Crédit
International. She joined the Pinault group in 1989 as Finance Director
and became Chief Executive Officer of Artémis in 1992. Patricia
Barbizet also is the Chairman of the Investment Commitee of Fonds
Stratégique d’Investissement and sits on the Boards of Director of
Bouygues*, Total* and Air France*.
Chairman and member of the Audit Committee of TF1
Chairman and member of the Remuneration Committee of TF1
2012 - Deputy CEO of Société Nouvelle du Théâtre Marigny; NonExecutive Director of Tawa PLC (UK)
Business address: 12, rue François-Ier – 75008 Paris
24
In France: CEO and Director of Artémis; CEO (non-proxy) and member
of the supervisory Board of Financière Pinault; Director and Vice
Chairman of the Board of Directors of PPR*; Director of Société Nouvelle
du Théâtre Marigny; standing representative of Artémis, Director of
Agefi, Sebdo le Point; Member of the supervisory Board of Yves Saint
Laurent; Member of the Management Board of Société Civile du
Vignoble de Château Latour; Director of Bouygues*, Fonds Stratégique
d’Investissement, Total*, Air France – KLM*
Outside France: Chairman and Board Member of Christies International
(UK); Member of the Board of Gucci (Netherlands); Amministratore
Delegatore and Amministratore de Palazzo Grassi (Italy)
Director of TF1 since July 12, 2000 – independent
*
Listed company.
2011 - Director of Fnac
2008 - Chairman of the Board of Directors and Director of Piasa
2
CLAUDE BERDA Born February 3, 1947 – French citizenship
Claude Berda founded the independent record label AB Productions
in 1977. In 1987 he decided to diversify into audiovisual production.
His group quickly became market leader and added a new business:
the distribution of TV programme rights. In 1996 Claude Berda floated
Groupe AB on the New York Stock Exchange to finance growth in
the new market for satellite-borne digital TV in France. He then
positioned the Group to benefit from the creation of freeview Digital
Terrestrial Television by founding NT1 in 2002 and acquiring TMC,
alongside TF1, in 2005. In parallel, Claude Berda diversified his wealth
management business, moving into real estate. In 2007 he sold 33.5%
of Groupe AB to TF1. In 2010 he finalised an agreement for the sale
of NT1 and TMC to TF1, thus refocusing Groupe AB on its catalogue
and pay-TV channels.
In France: Chairman and non-Executive Director of Groupe AB;
Manager of Port Noir Investment; Chairman and CEO of RTL 9; Director
of WB Télévision
2010 -Chairman of Monte Carlo Participation (MCP); Executive Vice
President and Director of Télé Monte Carlo (TMC); Member of the
supervisory Board of Groupe Lucien Barrière (SAS); Chairman and nonExecutive Director of HOP - Holding Omega Participations (formerly
Groupe AB)
Director of TF1 since February 17, 2010
Holds 492,815 shares in TF1
Business address: 132, avenue du Président Wilson – 93210 La Plaine
Saint Denis
MARTIN BOUYGUES Born May 3, 1952 – French citizenship
Martin Bouygues joined the Bouygues group in 1974 as works
supervisor. In 1978 he founded Maison Bouygues, a company
specialising in the sale of catalogue single-family homes. A Director
of Bouygues since 1982, Martin Bouygues was appointed Vice
Chairman in 1987. On September 5, 1989 he succeeded Francis
Bouygues as Chairman and CEO of Bouygues. Under his direction,
the Group pursued its development in construction and the media
(TF1), and launched Bouygues Telecom in 1996. In 2006 Bouygues
acquired a stake in Alstom and thus positioned itself in two new highgrowth business lines: transportation and energy.
Director of TF1 since September 1, 1987
In France: Chairman and CEO Director of Bouygues SA*; Member of
the supervisory Board of Paris Orléans (SADCS)*, Chairman of SCDM;
Permanent Representative of SCDM, Chairman of ACTIBY, SCDM
Participations and SCDM Invest – 3; Member of the Board of Directors
of the Francis Bouygues Foundation and the Skolkovo Foundation
2010 - Representative of SCDM; Chairman of F1 Participations; Director
of SODECI* (Côte d’Ivoire); Director of Compagnie Ivoirienne d’Électricité
(CIE)
2009 - Representative of SCDM, Chairman of Investaq Energie
Chairman and member of the Selection Committee of TF1
Business address: 32, avenue Hoche – 75008 Paris
*
Listed company.
25
2
OLIVIER BOUYGUES Born September 14, 1950 – French citizenship
Olivier Bouygues, a graduate of École Nationale Supérieure du Pétrole
(ENSPM), joined the Bouygues group in 1974. He began his career
in the Group civil works branch. From 1983 to 1988 at Bouygues
Offshore, he held the posts of Director of Boscam, a Cameroon
subsidiary, then Director of the France Works and Special Projects
Division. From 1988 to 1992 he was Chairman and CEO of Maison
Bouygues. In 1992 he became Group Executive Vice President of
Utilities Management, which grouped the international and French
activities of Saur. In 2002 Olivier Bouygues was appointed Deputy
CEO of Bouygues.
Other appointments within the TF1 group
In France: Director of Eurosport
Other appointments outside the TF1 group
In France: Deputy CEO of Bouygues*; Standing Representative of
SCDM, Director of Bouygues*; CEO of SCDM; Director of Colas*,
Bouygues Telecom, Bouygues Construction, Alstom*, Finagestion;
Chairman of SAGRI-E and SAGRI-F; Chairman of SCDM Énergie;
Manager (non-partner) of SIB and SIR
Outside France: Chairman of the Board and Director of Bouygues
Europe (Belgium); Chairman and CEO and Director of SECI
(Côte d’Ivoire); Director of Sénégalaise des Eaux (SDE) (Senegal), Société
de Distribution d’Eau de la Côte d’Ivoire* (SODECI) (Côte d’Ivoire), and
Compagnie Ivoirienne d’Électricité* (CIE) (Côte d’Ivoire)
Director of TF1 since April 12, 2005
Most recent renewal: April 14, 2011 expiring in 2013
2011 - Representative of SCDM, Chairman of SCDM Energie
2010 - Member of the Management Committee of Cefina; Representative
of SCDM, Chairman of SCDM Investur, and SCDM Investcan
2009 - Chairman of the Board of Finagestion
FANNY CHABIRAND Born September 14, 1976 – French citizenship
Holder of a Masters in Sciences and Techniques in Tourism, Fanny
Chabirand joined TF1 on January 1, 2007 and since then has acted as
Commercial Assistant of the TF1 Works Council.
Staff representative director of TF1 since March 13, 2012
None
Next renewal: 2014
*
26
Listed company.
None
2
LAURENCE DANON Born January 6, 1956 – French citizenship
A graduate of École Normale Supérieure (Ulm) and of the Corps des
Mines, Laurence Danon holds a teaching qualification in physics and
a post-graduate diploma in organic chemistry. She began her career
in 1984 at the French Ministry of Industry as head of the Industrial
Development Division working in industry and research for the Picardy
region. In 1987 she joined the Hydrocarbons Division of the Ministry of
Industry, as head of the Exploration-Production Department.
In 1989 she joined the Elf Group, where she exercised commercial
responsibilities within the Polymers Division. In 1991 she became
Director of the Industrial Specialties Division, and in 1994 Director of
the Global Division of Functional Polymers. In 1996 she became CEO
of Ato Findley Adhesives, which became Bostik following the merger
with Total in 1999. Bostik is world no. 2 in adhesives.
In France: Co-Chair of the Board of Directors of Leonardo & Co;
Member of the Supervisory Board and Chairman of the Appointments
and Remuneration Committee of BPCE (Banques Populaires – Caisse
d’Épargne)
Outside France: Director of Diageo plc (UK)
2012 - Chair of the Board of Edmond de Rothschild Corporate Finance
2011 - Director of Rhodia
2010 - Director of Plastic Omnium
2009 - Director of Experian
2008 - Director of Lafuma
In 2001 she was appointed Chairman and CEO of Printemps.
Following the successful sale of Printemps in October 2006, she left
her job in February 2007.
Laurence Danon then joined Edmond de Rothschild Corporate
Finance in 2007, as member of the Executive Committee, and then
became Chairman of the Executive Committee.
Since January 1, 2013, she is co-Chairman of the Executive Committee
of the investment bank Leonardo & Co.
Laurence Danon also chairs the “Prospective” (outlook) commission
of the MEDEF.
Director of TF1 since July 22, 2010 - independent
Member of the TF1 Audit Committee
Business address: 47, rue du Faubourg Saint-Honoré - 75008 Paris
27
2
JANINE LANGLOIS-GLANDIER Born May 16, 1939 – French citizenship
Janine Langlois-Glandier is a graduate of Institut d’Études Politiques
de Paris, holds a post-graduate diploma in private law and is a
qualified lawyer with the Paris bar.
She joined ORTF en 1967, working at the Management Control and
Finance Department and then at the Staff Department, where she
managed art and production employees.
In 1975 she joined Radio France, and then Société Française de
Production (SFP), where she was named Corporate Secretary in 1981.
In France: Chair of Forum des Medias Mobiles; Vice Chair of Fonds
d’action de la Société des Auteurs Compositeurs et Éditeurs de
Musique (SACEM); Director of Fransat; member of Conseil Culturel de
la Monnaie de Paris.
None
She became Managing Director of Société Française de Production
and SFPC, the film subsidiary of SFP, in 1983.
She was appointed Chair of FR3 in 1985 and Chair of La Sept (later
ARTE) in 1986.
From 1987 to 1990 she chaired the National Audiovisual Institute (INA).
She is also a Director of Agence France-Presse (AFP) and Comité de
Conservation des Archives Audiovisuelles.
She served as Managing Director of Pathé Cinéma and Chair of Pathé
Télévision and Pathé Interactive (a Pathé/Philips subsidiary) from 1991
to 1997.
She also sits on the Boards of the newspaper Libération and
Cinémathèque Française.
From 1997 to 2002 she worked for Conseil Supérieur de l’Audiovisuel
(CSA), in charge of cinema, advertising and sport.
She has chaired Forum des Médias Mobiles since 2005.
Director of TF1 since April 19, 2012 - independent
Next renewal: 2014
Business address: 17, rue Hamelin - 75016 Paris
SFPG - SOCIÉTÉ FRANÇAISE DE PARTICIPATION ET DE GESTION
RCS Paris 332 888 916
Director of TF1, represented by Olivier Roussat since July 31,
2007
None
Most recent renewal: April 14,2011, expiring 2013
None
Business address: 16/18 Impasse d’Antin – 75008 Paris
28
2
OLIVIER ROUSSAT Born October 13, 1964 – French citizenship
A graduate of INSA in Lyon, Olivier Roussat began his career in 1988
at IBM, where he occupied a number of positions in data network
services, service delivery, and pre-sales. He joined Bouygues Telecom
in 1995 to set up the network management centre and network
processes. He then became head of network operations and telecoms
and IT service delivery.
In May 2003 he was appointed network manager and became a
member of the Executive Committee. In January 2007 Olivier Roussat
took charge of the performance and technology unit which combines
Bouygues Telecom’s cross-functional technical and IT Departments,
including networks, information systems, process engineering,
purchasing, corporate services and property development. He was
also given responsibility for Bouygues Telecom’s new headquarters
and technical centre.
In France: CEO and Director of Bouygues Telecom; Director of ETDE.
2012 - Director of Extenso Telecom and Réseau Clubs Bouygues Telecom
(RCBT)
2008 - Director of Stock com
Olivier Roussat became Deputy Chief Executive Officer on February 20,
2007. He was appointed Chief Executive Officer on November 29,
2007.
Standing representative of Société Française de Participation et
de Gestion (SFPG), Director of TF1 since April 9, 2009
Most recent renewal: April 14, 2011 expiring 2013
Member of the Selection Committee of TF1
BOUYGUES
RCS Paris 572 015 246
Director of TF1, represented by Philippe Marien since February 20,
2008
Director of Bouygues Telecom, Colas*, Alstom*, Bouygues Immobilier,
GIE 32 Hoche, C2S, Bouygues Construction; Associate Member of
Organisme Gestionnaire du Centre Gustave Eiffel (Association Loi 1901
– not-for-profit organisation); Member of the Board of Directors of
Organisme Gestionnaire du Centre Gustave Eiffel (Association Loi 1901)
and of the Fondation Dauphine.
Most recent renewal: April 14,2011, expiring 2013
Holds 91,946,297 shares in TF1
2008 - Director of Bouygues Bâtiment International, SOTEGI,
Bouygues Travaux Publics, Bouygues Bâtiment Île-de-France, CATC
*
Listed company.
29
2
PHILIPPE MARIEN Born June 18, 1956 – French citizenship
A graduate of École des Hautes Études Commerciales (HEC), Philippe
Marien joined the Bouygues group in 1980 as international finance
manager. He was special advisor in 1984 for the takeover of the
AMREP oil services Group before being named Finance Director of
Technigaz, a liquefied gas engineering contractor, in 1985.
In 1986 he joined the Group’s Finance Division to take responsibility
for the financial aspects of the takeover of Screg. He was successively
head of finance and cash management of Screg in 1987 and Finance
Director of Bouygues Offshore in 1991.
Outside France: Director of Bouygues Europe (Belgium)
In France: Chairman of the Board of Directors of Bouygues Telecom;
Standing Representative of Bouygues*, Director of Colas*, Alstom*,
Bouygues Construction, Bouygues Immobilier; CEO of SCDM;
Liquidator of Finamag
2009 - Representative of Bouygues, Director of Bouygues Telecom
He was appointed Senior Vice President for Finance and Administration
of Bouygues Offshore in 1998, before moving to Bouygues Bâtiment in
2000 as Chief Financial Officer.
In March 2003 Philippe Marien became Chief Financial Officer of
the Saur Group. He managed the sale of Saur by Bouygues to PAI
partners, then by PAI partners to a new Group of shareholders led by
Caisse des Dépôts et Consignations. He was named Chief Financial
Officer of the Bouygues group in September 2007. On February 18,
2009 Philippe Marien was appointed Chairman of Bouygues Telecom’s
Board of Directors, replacing Philippe Montagner.
Standing representative of Bouygues – Director of TF1 since
February 20, 2008
Member of the Audit Committee of TF1
Member of the Remuneration Committee of TF1
GILLES PÉLISSON Born May 26, 1957 – French citizenship
A graduate of ESSEC and holder of an MBA from the Harvard Business
School, Gilles Pélisson started his career in 1983 with the Accor Group,
first in the United States and then in Asia-Pacific. At Accor he served
as the co-Chairman of the Novotel hotel chain. He was named CEO
of Euro Disney in 1995 and Chairman and CEO in 1997. He moved
to the Suez Group in 2000 and then to Bouygues Telecom, where
he served as CEO before being appointed as Chairman and CEO in
February 2004. He was appointed CEO of Accor in January 2006,
then Chairman and CEO up to December 2010.
Director of TF1 since February 18, 2009 - independent
2011 - Chairman of the Board of Directors of Accor*; Representative of
Accor on the Supervisory Board of Lenôtre.
Business address: avenue Molière 143, 1190 Brussels, Belgium
In France: Director of BIC and Groupe Lucien Barrière
Outside France: Director and Member of Global Advisory Board de
NH Hoteles (Madrid); Director of Accenture PLC (USA); Director of Sun
Resorts International (Maurice); Jefferies Inc NY bank (USA)
2012 - Director of the Global Business Coalition on HIV/AIDS,
Turberculosis and Malaria, Inc. (USA) 2010 - Chairman and CEO of Accor*; Chairman of la Fondation Accor; Vice
Chairman and member of the Supervisory Board of Groupe Lucien Barrière;
Chairman of the Supervisory Board of Lenôtre; Representative of Accor
on the Board of Directors of ASM; Director of Accor Partecipazione Italia
(Italy), Sofitel Italia (Italy), and Accor Hospitality Italia (Italy)
2009 - Chief Executive Officer of Accor*; Chairman of the Supervisory
Board of Essec
*
30
Listed company.
2
JEAN-PIERRE PERNAUT Born April 8, 1950 – French citizenship
A graduate of École Supérieure de Journalisme in Lille, Jean-Pierre
Pernaut joined the ORTF in 1972 as a reporter and newscaster. In
1975 he became the editor-in-chief and presenter of TF1’s late-night
news broadcast, 23h.
None
None
From 1978 to 1980 he co-anchored the midday news programme,
Journal de 13h, with Yves Mourousi. He rejoined the show in
February 1988 and continues to present the news today, more than
25 years later.
For the past 24 years Jean-Pierre Pernaut has also been the Deputy
Director for Information and a Director of the TF1 group.
He presented the programme Combien Ça Coûte on TF1 between
July 1991 and June 2010 and has hosted the Paroles de Français
programmes with the French President in 2010 and 2011.
Jean-Pierre Pernaut has received five “Sept d’Or” awards for his
presentation of the Journal de 13h. In 1999 he was awarded the
Roland Dorgelès prize, which recognises broadcast professionals who
best respect the French language.
Director of TF1, representing the staff, since February 23, 1988
Most recent renewal: March 13, 2012, expiring 2014
31
2
2.1.2 Composition of Board Committees
Each of the Committees is governed by the Board’s rules of procedure. The members of the Committees are appointed by the Board of Directors and
are chosen both for their experience and for the specific skills needed to carry out the duties of each Committee.
AUDIT COMMITTEE
The Audit Committee was strengthened on April 14, 2011 by the appointment of Laurence Danon, independent Director, alongside Patricia Barbizet,
Chair and independent Director, and Philippe Marien.
These individuals were chosen for their extensive experience in accounting and finance and for their training and functions.
The Board will be called on to review the composition of the Audit Committee following the General Meeting of April 18, 2013, as Patricia Barbizet has
not requested the renewal of her term of office.
REMUNERATION COMMITTEE
Since April 14, 2011, the Remuneration Committee has been composed of Patricia Barbizet, Chair and independent Director, and Philippe Marien.
The Board will be called on to review the composition of the Remuneration Committee following the General Meeting of April 18, 2013, as Patricia
Barbizet has not requested the renewal of her term of office.
SELECTION COMMITTEE
Since April 19, 2012 the Selection Committee has been composed of Martin Bouygues, Chairman, and Olivier Roussat, non-independent Directors.
32
Chairman’s report
2
2.2 CHAIRMAN’S REPORT
In addition to the management report of the Board of Directors and in
compliance with prevailing law and regulation, this report consists of a
review by the Board Chairman, as approved by the Board at its February
19, 2013 Meeting, of the composition of the Board and the application
of the principle of gender equality on the Board, the conditions in which
the work of the TF1 Board is prepared and organised, the procedures
concerning corporate governance, the principles and rules adopted by
the Board to decide on the remuneration and benefits in kind granted to
executives, the procedures concerning the participation of shareholders
at the company’s General Meetings, and the company’s internal control
and risk management procedures.
2.2.1 Chairman’s report on corporate governance
GENERAL PRINCIPLES OF CORPORATE
GOVERNANCE
GOVERNANCE SYSTEM
The Board of Directors is responsible for the administration of the
company. The general management of the company has been the
responsibility of the Chairman of the Board since 1988(1).
The Directors deliberate the governance of the company while ensuring
that essential requirements are met, i.e. equal treatment of shareholders
and Board efficiency.
When TF1 was privatised in 1987, to protect the interests of its
shareholders, TF1 and its Directors set up a Remuneration Committee
and limited the term of office for Directors and the Chairman and CEO
to two years.
In 2003 the Directors strengthened their resources to enhance
management transparency by:
p adopting the rules of procedure of the Board of Directors which, for
example, impose new obligations on Directors as well as a number
of ethics rules (holding Directors’ shares in registered form, reporting
dealings in TF1 shares, regular attendance at Board Meetings,
attendance at the General Meeting, disclosure of conflicts of
interest, etc.);
p creating an Audit Committee and a Selection Committee;
p appointing an independent Director.
In 2007 the Directors took account of the recommendations on the
remuneration of executives of listed companies issued on January 9,
2007 by MEDEF and AFEP. The Board decided to comply with
these recommendations by adding new provisions to its own rules of
procedure and to those of the Selection Committee.
In early 2008 the Directors again added to the rules of procedure by:
p arranging for the Board to determine the number of bonus shares
or option shares that the Chairman of the Board and the CEO are
required to hold throughout their term in office;
p adding provisions prohibiting grants of options or bonus shares on the
departure of an executive and the use of risk hedging for the purpose
of exercising options or selling bonus shares;
p incorporating the recommendations of the Corporate Governance
Code resulting from the consolidation of the co-reports of AFEP and
MEDEF of October 2003, January 2007 and October 2008.
In 2010 the Directors updated the rules of procedure relating to the Audit
Committee.
In late 2010 TF1 harmonised its black-out schedule for insiders to comply
with the recommendations published by the AMF on November 3, 2010
in its “Guide to preventing insider misconduct by senior executives of
listed companies”. Black-out periods begin 30 calendar days before the
publication of annual, half-yearly and quarterly accounts and run until the
day of publication.
In July 2011 the Directors voted to revise the rules of procedure. The new
text takes account of the most recent provisions on equal opportunities
and pay, which the Board voted on for the first time at its Meeting on
November 10, 2011. The new text also takes account of the most recent
provisions on social and environmental information and the functioning
of the Audit Committee, together with AMF recommendations on the
prevention of insider misconduct. The Board of Directors approved the
Code of Ethics text, included in the appendix of the rules of procedure of
the Board of Directors and containing provisions on compliance, which
previously were included in the Articles of the rules of procedure.
(1) Apart from the period from May 2007 to July 2008, when the functions of Chairman and Chief Executive Officer were separated to enable a natural and operational transition of the
executive management of the company between Patrick Le Lay and Nonce Paolini.
33
2
Chairman’s report
To comply with AMF recommendations, the Board of Directors has
appointed Sébastien Frapier, Group Legal and Business Affairs Director
and Board Secretary, as compliance officer. Directors seeking to make a
trade in TF1 shares have the option of using a regulated trading mandate,
which enables them to benefit from a rebuttable presumption that they
have not committed insider misconduct or to consult the compliance
officer in order to ensure that they are not acting as insiders. Under the
revised rules of procedure, this consultation is obligatory for Executive
Directors and salaried Directors.
REFERENCE TO AFEP/MEDEF CODE
Most of the recommendations of Association Française des Entreprises
Privées (AFEP) and Mouvement des Entreprises de France (MEDEF)
have long been implemented at TF1.
In February 2009 the AFEP/MEDEF Code recommendations were
included in TF1’s corporate governance policy. The Board of Directors
decided that the company would refer on a voluntary basis to the AFEP/
MEDEF Code. These recommendations are listed in the appendix of the
Board’s rules of procedure text. The Code is available on the MEDEF
website at www.medef.com.
However, some of the Code’s provisions may be set aside or judged
inappropriate for the functioning of the company given its particular
circumstances. Under the Privatisation Act of September 30, 1986, a
Group of investors led by the Bouygues group was assigned 50% of the
capital of TF1 on April 4, 1987; and since January 27, 2006 Bouygues
has been the sole participant in the privatisation of TF1. In that capacity
it is responsible for honouring the commitments made by the Group of
investors, particularly with regard to the continuity of operations.
The table on page 35 of the present registration document and annual
financial report includes the provisions in the AFEP/MEDEF Code that
have been set aside and the reasons why.
34
BOARD OF DIRECTORS RULES OF PROCEDURE
The rules of procedure of the Board of Directors, setting forth the rights
and duties of Directors and the operating mode of the Board, were
adopted at the Board Meeting of February 24, 2003, initiating an Audit
Committee and a Selection Committee and extending the responsibilities
of the Remuneration Committee, in place since 1987.
The rules of procedure were subsequently regularly modified to take
account of the best governance practices.
The main provisions in the rules of procedure of the Board of Directors
concern the powers, duties and tasks of the Board and its committees.
The rules also set out the principles for the annual assessment of the
functioning of the Board.
The rules of procedure may be accessed at the company website:
www.groupe-tf1.fr.
GENERAL RULES ON THE COMPOSITION OF THE BOARD OF
DIRECTORS AND THE APPOINTMENT OF DIRECTORS
The Articles of Incorporation state that the company is managed by a
Board of Directors of twelve members, of whom ten are appointed by
the Combined Annual General Meeting.
Two are selected by electoral colleges of employees in compliance
with Article 66 of Act 86-1067 of September 30, 1986 on freedom of
communication, according to which at least one-sixth of the Board
should be made up of employee representatives and one seat should
be reserved for engineers, executives and those in a similar category.
The term of office of Board members is two years.
Chairman’s report
2
The company complies with the entire AFEP/MEDEF Code, excluding the provisions listed in the following table, which also explains why these
provisions were set aside.
AFEP/MEDEF Code provisions set aside
Reason
Article 8.4:
The criteria used by the committee and the board
when qualifying an independent director:
■ Not be an employee or an officer of TF1 or an
employee or Director of its parent company or of
one of its consolidated subsidiaries, and not have
been one within the last five years
■ Not be a director of the company for more than
12 years
According to Article 8.3 of the AFEP/MEDEF Code, the Board may consider that a director not fulfilling
all the independence criteria set forth in the Code is nevertheless independent given his or her particular
situation or that of the company, in respect of its shareholders or for any other reason.
In application of this provision, the Board reviews the situation of directors exercising or having exercised
the functions of director at the Bouygues group, with a view to determining whether the importance or
the nature of such functions is likely to affect the independence of their judgment or place them in a real
or potential situation of conflict of interest. As such, the Board considers that the personality, qualities
and freedom of judgment of Patricia Barbizet ensure the independence required for her to exercise her
functions. Patricia Barbizet thus has the status of independent Director.
In addition, the Board considers that holding a directorship for 12 years does not diminish the quality
of independence of the Board member concerned. The effective contribution of each Director in the
work of the Board and the experience acquired on the Board enhances the individual’s knowledge of
regulatory and legal aspects in the audiovisual sector, which is being reorganised in response to the
difficult economic environment.
Article 9.2:
The assessment shall in particular measure the
effective contribution of each director to the work of
the board through his or her skills and involvement
in debate
Given the collegial character of the Board favoured by TF1, the assessment questionnaire focuses on
the collective contribution of the directors to the functioning of the Board.
Article 12:
Directorships shall be staggered so as to avoid the
change of an excessive number of directors at the
same time and to foster the harmonious renewal
of directors
The company has thus far been in favour of the frequent appointment of directors for a set two-year
term and is reviewing the principle of the harmonious renewal of directors.
Article 15.1 (referring to Article 16.1):
The Selection Committee shall be composed as a
majority of independent directors
The composition of the committee takes account of the fact that under the privatisation law Bouygues
became the main player in the privatisation of TF1 and as such is responsible for respecting the
requirements undertaken by the group of investors, in particular the requirement concerning business
continuity. Since January 2006 Bouygues has been the only shareholder remaining from the original
investor group.
RULES ON THE INDEPENDENCE OF MEMBERS OF THE BOARD
OF DIRECTORS
The AFEP/MEDEF Code considers that a Director is independent when
“he or she has no relationship of any kind with the company, its Group or
its Management that could compromise the independence of his or her
judgement” and sets forth the following independence criteria:
p not be an employee or an officer of TF1 or an employee or Director of
its parent company or of one of its consolidated subsidiaries, and not
have been one within the last five years;
p not be a corporate officer of a company in which TF1 holds a
directorship, directly or indirectly, or in which an employee appointed
as such or a corporate officer of the company (currently in office or
having held such office going back five years) is a Director;
p not be a customer, supplier, investment banker or commercial banker
with material importance for the company or its Group, or for which
TF1 or its Group generates a material portion of business;
REVIEWING THE INDEPENDENCE OF DIRECTORS
The Board of Directors reviews annually and on an individual basis,
following the opinion of its Selection Committee, the situation of each
Director in respect of all the independence rules of the AFEP/MEDEF
Code. The Board of Directors, following the opinion of the Selection
Committee, proposes the appointment and/or renewal of directors at
the Shareholders’ Annual Meeting.
Under Article 8.3 of AFEP/MEDEF Code, the Board of Directors may
consider that a Director not fulfilling all the independence criteria in the
Code may nevertheless be independent, given his or her particular
situation or that of his or her company, in respect of its shareholders, or
for any other reason.
The Board paid particular attention to Directors holding or having
held directorships in the Bouygues group to ascertain whether these
duties were such, either because of their importance or nature, that the
Director’s independent judgement might be affected or that he or she
might face a real or potential conflict of interest.
p not be related by close family ties to a corporate officer;
p not have been an auditor of TF1 within the last five years;
p not have been a Director of TF1 for at least 12 years.
35
2
Chairman’s report
Apart from Nonce Paolini, the non-independent Directors are Martin
Bouygues, Olivier Bouygues, Philippe Marien, a standing representative
of Bouygues, and Olivier Roussat, a standing representative of Société
Française de Participation et de Gestion – SFPG.
The company considers that Patricia Barbizet is a person exterior to
the Bouygues group, whose qualities and freedom of judgment are not
called into question, even if she does not qualify as an independent
director under AFEP/MEDEF Code criteria.
Claude Berda is a non-independent Director. The Directors considered
that the arrival of Claude Berda, co-opted on February 17, 2010, would
increase the Board’s competencies because of his extensive knowledge
of the TV industry.
The Directors want to continue opening up the Board to other
independent Directors besides Gilles Pélisson, fully independent, and
increasing the presence of women on the Board.
When co-opting Laurence Danon on July 22, 2010, the Directors
considered that, according to the principles in the AFEP/MEDEF Code,
she was fully independent.
The appointment as Director of Janine Langlois-Glandier at the General
Meeting of April 19, 2012 strengthened the independence and gender
equality of the Board. According to the principles in the AFEP/MEDEF
Code, the Selection Committee indeed observed that Janine LangloisGlandier was fully independent.
The independent Directors are Patricia Barbizet, Laurence Danon,
Janine Langlois-Glandier and Gilles Pélisson.
As at February 19, 2013, the TF1 Board of Directors had 12 Directors, of
whom 4 were women, including:
p 4 Directors representing the sole remaining shareholder of the Group
of acquirers and responsible for meeting the obligations agreed to by
that Group;
p 1 Director representing senior management;
p 4 independent Directors;
p 1 non-independent Director;
p 2 Directors representing employees, elected in compliance with
Article 10 of the Articles of Incorporation by the electoral colleges of
employees under Article 66 of Act 86-1067 of September 30, 1986.
DUTIES OF DIRECTORS – CONFLICTS OF INTEREST – CODE
OF ETHICS – CONVICTIONS - OTHER INFORMATION
To the knowledge of TF1, in the last five years no member of a Board
body has been:
p convicted of fraud; associated with a bankruptcy, compulsory
administration or liquidation;
p incriminated or publicly sanctioned by any statutory or regulatory
authority, including professional organisations;
36
p prevented by a court from acting as a member of a Board of Directors,
a Management Board or a Supervisory Board of a publicly listed
company or from running such a company.
No restrictions are imposed on the members of the Board of Directors
concerning the disposal of their holdings of the issuer’s shares, with two
exceptions:
p the Chairman and CEO is required to hold a minimum number of
bonus shares or option shares throughout his or her term of office;
p each Director is required to own at least one share in the company.
The rules of procedure of the Board of Directors recommend that each
Director not representing employees should own at least 100 shares
for the duration of his or her term in office and respect the rules to
prevent insider dealing.
Directors are regularly reminded of the obligation placed upon them
to declare any dealings in TF1 shares undertaken by themselves or
by persons with close personal ties to them. Such dealings must be
reported within five days of the trade in accordance with Article 223-22
of the General Regulation of the French securities regulator, Autorité des
Marchés Financiers (AMF). TF1 reports this information, which includes
the individual’s name, to the AMF and makes it public in a press release.
Article 5 of the Code of Ethics contains detailed provisions aimed at
preventing conflicts of interest. The company is currently aware of the
following potential conflicts of interest:
p Bouygues, the majority shareholder, is represented on the Board of
Directors by Martin Bouygues, Olivier Bouygues, Philippe Marien and
Olivier Roussat. Nonce Paolini has a relation with Bouygues through
an employment contract. He is also a Director of Bouygues;
p Claude Berda is a shareholder of WBTV, a company 49% owned by
TF1, and Chairman of Groupe AB, a company 33.5% owned by TF1;
p Fanny Chabirand and Jean-Pierre Pernaut are linked to the company
by work contracts.
To the company’s knowledge, none of the members of the Board of
Directors (who are natural persons) is linked to TF1 or to any of its
subsidiaries by a service contract that provides for the granting of
benefits.
To the company’s knowledge, no potential conflicts of interest currently
exist between the duties toward the company of the members of the
Board of Directors and their private interest or other duties.
The Statutory Auditors’ special report dealing with regulated agreements
and undertakings (see page 188) assesses the agreements and
undertakings submitted to the approval of the Board and concerning
which the Directors refrained from voting for given the existence of real
or potential conflicts of interest.
In July 2011 the Board revised its rules of procedure, grouping all
compliance-related obligations placed on Directors in a Directors
Charter, which was appended to the rules of procedure and is available
on the website at www.groupe-tf1.fr.
Chairman’s report
2
FUNCTIONING AND MISSIONS OF THE BOARD
COMMITTEES
The assessment looks at the schedule and length of Board Meetings,
the agenda, the quality of discussions, the work of the committees and
the information provided to Directors.
ORGANISATION OF THE BOARD OF DIRECTORS
To debate the organisation and functioning of the Board, a detailed
questionnaire is sent in advance to the Directors. Given TF1’s attachment
to the collegial character of the Board of Directors, the questionnaires
are focused on the collective contribution of the Directors and the
Committee members to the functioning of the Board.
The administration of the company is entrusted to a Board of Directors.
Directorships are renewed every two years.
The TF1 Board of Directors operates in a manner that complies with legal
and regulatory provisions, the rules set out in the company’s Articles of
Incorporation, the Board’s regularly updated rules of procedure, and the
recommendations of the AFEP/MEDEF Code of Corporate Governance.
All the Directors have the same powers and duties. Decisions are taken
collectively.
As part of its assessment, the Board of Directors places particular
emphasis on the training, skills and experience of each of its members,
as well as their knowledge of the Group’s business lines, which will
enable them to make an effective contribution to the work of the Board
and to that of the three committees that assist it: the Audit Committee,
the Remuneration Committee and the Selection Committee.
The Board aims to improve governance in terms of independence and
increasing the presence of women.
Since the appointment of Janine Langlois-Glandier in 2012, the Board
has included four independent Directors. The independence of the Audit
Committee was strengthened by the arrival of Laurence Danon in this
Committee.
Including Fanny Chabirand, staff representative Director, the TF1 Board
of Directors includes four women, accounting for 30% of members. The
Board will reach the 40% threshold within the scheduled deadline, i.e at
the latest in 2017.
The expertise of the Directors, based on their experience, ability
to understand the challenges and risks facing Group businesses,
diverse and complementary backgrounds and training, as well as their
involvement, ensure a high standard of debate and deliberation within
the Board. The Board of Directors is balanced, diversified, experienced
and accountable.
The Board has not appointed any non-voting Directors.
BOARD ASSESSMENT
Each year, in accordance with the AFEP/MEDEF Code, the Directors
scrutinise Board practices particularly with regard to composition,
organisation and operation. They assess the Board’s role and
whether the Board is appropriately organised; and they do the same
for its committees. The rules of procedure stipulate that the Selection
Committee should periodically address issues relating to Board
membership, organisation and operation with a view to making
proposals to the Board.
The objectives of the annual assessment are to review the Board’s
operating methods, ensure that key questions are adequately prepared
and debated, and measure the effective contribution of the Directors to
the Board’s work.
As a whole, the Directors’ responses expressed a positive or very
positive assessment of the composition, organisation and operation
of the Board and his Committees. The Directors noted that their wish,
expressed in November 2011, to strengthen the Board through the
appointment of independent Directors had been taken into account with
the arrival of Janine Langlois-Glandier in April 2012.
The information received on most issues was judged satisfactory to very
satisfactory. Some Directors said that information could be improved in
some areas, including competition, strategy and long-term development.
The assessment served to verify that important issues are correctly
prepared for and debated and that the Directors are efficient and
dedicated. The Directors appreciate having the opportunity to bring
together the Board’s ad hoc committees to discuss acquisition and
development topics.
The Committees were positively or very positively appraised. Members
considered debates high level and answers clear.
The Directors’ remuneration system through Directors’ fees was deemed
satisfactory.
The need to increase the presence of women (currently 30%) on the
Board is another priority that will guide future discussions on enhancing
TF1 governance.
PROPOSAL ON THE COMPOSITION OF THE BOARD
SUBMITTED AT THE GENERAL MEETING OF APRIL 18, 2013
– RENEWAL OF THE TERMS OF SEVEN DIRECTORS –
APPOINTMENT OF TWO NEW DIRECTORS
The Board of Directors meeting of February 19, 2013 reviewed the
directorships coming to an end at the next General Meeting, taking into
account the expertise of the current Directors and the need to respect
the increased presence of women Directors, in line with Act 2011-103 of
January 27, 2011 on the balanced representation of women in Boards of
Directors and Supervisory Boards and on professional gender equality.
After receiving the opinion of the Selection Committee, the Board of
Directors proposed the following to shareholders at the General Meeting:
p the appointment as a new Director of Catherine Dussart, a producer
of long-format films, replacing Patricia Barbizet, who has not
requested a renewal of her directorship. The Board of Directors
reviewed Catherine Dussart’s directorship candidacy in the light of
the independence rules of the AFEP/MEDEF Code. It concluded that
Ms Dussart should be considered as an independent Director as she
meets all the criteria set out in the Code.
37
2
Chairman’s report
After studying management, Catherine Dussart began her career as a
press officer and then became a producer.
She started out with short films, before moving naturally on to feature
films and long-format documentaries for the cinema and television
with the creation of Les Productions Dussart in 1992 and CDP in
1994. She is currently a member of the Club of European Producers,
a consultant for Ateliers du Cinéma Européen (ACE), a member of
the Board of Directors of the Franco-Russian Cinema Academy and
a member of the Committee on aid to world cinema organised by
Centre National de la Cinématographie (CBC). She was a member
of the CNC’s committee on advances on takings for two years and
Vice Chair in 2004, as well as a member of the CNC’s distribution aid
committee;
p the appointment as a new Director of Olivier Roussat, CEO of
Bouygues Telecom, previously standing representative of Société
Française de Participation et de Gestion – SFPG, which has not
requested a renewal of its directorship. The Board notes that Olivier
Roussat will not be independent according to the criteria of the AFEP/
MEDEF Code;
p the renewal of the directorships of Claude Berda, Martin Bouygues,
Olivier Bouygues, Laurence Danon, Nonce Paolini, Gilles Pélisson and
the Bouygues company.
BOARD MISSION
The Board plays a key role in determining the strategy and key policies
of the company and the Group and in monitoring the implementation of
these policies.
The mission of the Board of Directors is thus to:
p determine the strategy and policies of the company and the Group;
p conduct major operations, undertake major investments and carry out
internal restructuring;
p monitor execution of the above operations;
p report to shareholders and financial markets;
p carry out any checks and verifications that it considers appropriate;
p set the remuneration of corporate officers.
A review is made at each Board Meeting of the operations and events
having occurred since the previous meeting and of the main projects
underway and likely to be completed before the next meeting. The Board
of Directors is informed at least once every quarter by the Executive
Committee of the financial situation, cash situation and commitments
of the company.
If voted, these appointment and renewal proposals would maintain at
4 out of 12 the number of independent persons and the number of
women on the Board of Directors.
Between Board Meetings, the Directors receive all the useful information
on significant Group events and operations. More generally speaking,
they may at any moment receive from the Chairman all the information
and documents they consider useful to the achievement of their duties.
The Board has committed to pursuing the improvement of its governance
in terms of independence, the presence of women and the diversity of
its composition.
BOARD OF DIRECTORS RESPONSIBLITIES
AND ACTIVITIES IN 2012
Board Meetings are in principle held quarterly, and additional Meetings
may be convened for special presentations or to examine exceptional
issues.
The TF1 Board of Directors met seven times in 2012 and constituted
two ad hoc committees, in May and September.
The following table details the Board’s main decisions and attendance
rates for 2012.
38
Chairman’s report
Board Meeting
Main decisions
February 15th (1)
Review of activity in 2011 and the outlook for 2012; approval of individual and consolidated annual financial
statements in 2011 and the proposed allocation of earnings, submitted to Annual General Meeting; approval
of accounting and forward-looking documents; information on projects underway, notably the registration of
three bids by TF1 in response to the CSA’s call for tender concerning six new HD channels and the renewal
of the agreement between TF1 Droits Audiovisuels and UGC; consideration of legal and regulatory changes
in the audiovisual sector and current litigation; review of reports from the Selection and Remuneration
Committees; observation of the increase in company capital through the issue of TF1 shares subscribed
as part of the option subscription plan; proposal of the appointment of Janine Langlois-Glandier as a new
Director at the Annual General Meeting; financial authorisations, approval of reports and resolutions presented
at the Annual General Meeting.
92%
April 19th
Before AGM
Results of staff representative director elections; appointment of Olivier Roussat as a member of the Selection
Committee; review of written questions from shareholders; review of current developments, notably the
selection by the CSA of the HD1 channel for national DTT and HD unscrambled broadcasts, and current
litigation; authorisation to negotiate a new profit-sharing scheme for employees of the TF1 group
75%
May 14th (1)
Review of consolidated financial statements for first-quarter 2012 and strategic focuses; update of plan;
examination of risk mapping; review of legal environment and cases underway; creation of an ad hoc
concerning the TF1 bid for the TV broadcast rights for the matches of the next two Rugby World Cups in
2015 and 2019 and the qualifying matches for Euro 2016 and the 2018 Soccer World Cup; authorisation
for new stock option plan.
75%
June 4th
Authorisation of project to acquire TV broadcast rights for UK Premier League and new distribution
agreements for British Eurosport 2.
83%
July 25th (1)
Review of first-half 2012 financial statements; update of accounting and forward-looking documents; outlook
and strategic focuses; follow-up on current files; report by May 24th ad hoc committee; creation of an ad hoc
committee to draw up the conditions for submitting the TF1 bid for the broadcast rights of the 2013-2015
seasons of the Formula One World Championship.
75%
November 13th (1)
Review of financial statements for third-quarter 2012; analysis of activity and estimated results for 2012,
the three-year plan, development and strategy; review of current files, legal and regulatory changes in the
audiovisual sector and current litigation, review of specifications; analysis of TF1 capital decrease; Group
policy on professional and pay equality; assessment of Board of Directors.
83%
December 12th
Authorisation of partnership with Discovery including Discovery’s acquisition of 20% of Eurosport and the
pay-TV channels (TV Breizh, Histoire, Ushuaïa TV et Stylía) and the development of production activities in
France through TF1 Production.
75%
2
Attendance
(1) The Board reviewed the report of the Audit Committee.
On average, the attendance rate of Directors in 2012 was 80%.
For major projects, the Board may ask some of its members to form an
ad hoc committee in order to approve projects and assess the impact
they have on the Group’s accounts and financial position.
An ad hoc committee of the Board of Directors was set up for (i) the
IRB call for tender to draw up the bid for the TV broadcast rights for the
matches in the next two Rugby World Cups, in 2015 in the UK and in
2019 in Japan, and (ii) the UEFA call for tender to draw up the bid for
the TV broadcast rights of the qualifying matches for Euro 2016 (France)
and the 2018 Soccer World Cup (Russia). Meeting on May 24, 2012
the committee, composed of Nonce Paolini, Laurence Danon, Philippe
Marien, Janine Langlois-Glandier and Olivier Roussat, consulted the
operational and functional heads concerned at TF1.
A second ad hoc committee met on September 5, 2012 to iron out
the conditions for the bid for the broadcast rights for the 2013 to 2015
season as part of the call for tender launched by the Formula One World
Championship. Committee members were also informed on advances
in the negotiations with IRB concerning the TV broadcast rights for the
next two Rugby World Cups, in 2015 and 2019, following the ad hoc
committee meeting on May 24, 2012. Meeting on September 5, 2012,
the committee was composed of Nonce Paolini, Patricia Barbizet and
Philippe Marien. It was also attended by the operational and functional
heads concerned at TF1.
39
2
Chairman’s report
INFORMATION
In general, the Directors get the information ahead of time that they need
to make decisions. Recommendations are made after due deliberation
and decisions are taken on a collegial basis.
Each Director has one vote. In the case of a tie, the Chairman of
the Meeting has the casting vote. The employee representatives
designated by the Works Council, the General Counsel, the Executive
Vice President, Group Purchasing and Finance Director, the Director of
Human Resources, and the Group Legal and Business Affairs Director,
who is in charge of secretariat duties, all attend Board Meetings. The
Statutory Auditors are invited to all Board Meetings convened to examine
the financial statements. Group senior executives regularly participate in
Board Meetings to help Directors understand the situation in the Group’s
market and businesses and provide information about developments
and strategy.
The role of the Board Secretary is to ensure that the Board operates
smoothly. The Secretary draws up the Board’s Meetings schedule,
prepares the agendas and organises Meetings with the Chairman and
CEO. The Secretary also prepares the draft minutes that are submitted
for Directors’ approval at the following Meeting. The Secretary organises
the Board assessment process, helps to prepare the documents
provided to shareholders ahead of the General Meeting and looks after
relations with individual shareholders. The Secretary also acts as the
Board’s compliance officer.
Directors receive a Notice of Meeting around two weeks before each
scheduled Meeting, together with the minutes of the previous Meeting.
During the Meeting, Directors are provided with all relevant documents
and information, together with a list of any risks that have been identified,
in accordance with regulatory constraints and in the interest of the
company. They also receive the minutes of the Meetings of the Audit,
Compensation and Selection Committees.
Directors periodically receive information about the company and the
Group, including strategic and business plans, information for monitoring
businesses and their revenues, the financial position, cash flow and
liabilities of the company, events affecting or likely to significantly affect
the Group’s consolidated profits, and the main events pertaining to
human resources and staffing levels.
TRAINING
On being appointed to the Board, each TF1 Director is given a
presentation on the company, its business lines and sectors of activity
and meets with the heads of the Group’s main divisions. And during
their terms of office, Directors can obtain additional training from key
managers of TF1 and its subsidiaries.
Each Director may also seek supplementary information on his or her
own initiative and the Chairman and CEO is permanently available to the
Board to provide explanations and substantive information.
TASKS OF THE COMMITTEES – INTERACTION WITH THE
BOARD
The Board of Directors may decide to set up one or more specialised
committees. It rules on the composition and attributions of these
committees, which work under its responsibility. The committees are
made up solely of Directors and serve to back up the work of the Board.
Each committee produces proposals, recommendations and opinions,
and reports on its work to the Board of Directors.
The Board has three specialised committees: the Audit Committee, the
Compensation Committee and the Selection Committee. It determines
the composition and powers of the committees, which carry out their
activities under the Board’s responsibility, and the Board appoints their
members from among the Directors.
The committees are chaired by persons who are not members of the
company’s management bodies and who have a casting vote. The
committees are composed of two or three Directors. Any individual
serving as Chairman, CEO or Deputy CEO of TF1 is not entitled to sit
on the Audit Committee or the Remuneration Committee. The Directors
consider that these provisions guarantee the committees’ independence
and efficiency.
The three committees meet at the initiative of their respective chairmen
or at the request of the Chairman of the Board of Directors and can
deliberate provided two of their members are present. Decisions are
made by simple majority of the members, who report on their work at
the next following Meeting of the Board of Directors.
If the Board is to discuss an issue within the jurisdiction of one of the
committees, it first refers the matter to the committee in question. The
discussion takes place after a report from that committee.
AUDIT COMMITTEE
Composition of Audit Committee
The Audit Committee was created on February 24, 2003 as the Accounts
Committee. Two thirds of its members are independent Directors and
have advanced skills in finance or accounting, in compliance with the
AFEP/MEDEF Code.
At February 19, 2013, the committee consisted of Patricia Barbizet,
Chair, independent Director, Laurence Danon, independent Director,
and Philippe Marien. The members were chosen for their extensive
accounting and finance expertise acquired through training and in their
professional functions. The arrival of Laurence Danon on the Committee
in April 2011 strengthened its independence. The biographies of the
members can be found in Chapter 2.1.1 of this document.
The composition of the Audit Committee will be changed after the
Annual General Meeting of April 18, 2013, as Patricia Barbizet has not
requested the renewal of her term of office as Director.
Rules of procedure of the Audit Committee
The Audit Committee is governed by rules of procedure that set forth its
tasks and duties. The rules of procedure are regularly modified by the
Board of Directors.
During each of the four meetings planned every year, the Audit Committee
reviews the quarterly, half-yearly and annual financial statements, the
40
Chairman’s report
cash situation and the conclusions of the Internal Audit and Internal
Control Departments before they are submitted to the Board.
The Committee is tasked with follow-up on issues concerning the
elaboration and monitoring of accounting and financial information. It is
notably responsible for:
p the process for preparing financial disclosures. As such, it:
− examines the parent company accounts and consolidated
financial statements at least two days before they are presented
to the Board,
− ensures the appropriateness and consistency of the accounting
methods adopted to prepare the accounts,
− examines the internal control procedures for the preparation of the
financial statements, with the assistance of internal departments
and competent advisors,
− examines changes that may have a material impact of the
financial statements,
− examines the principal estimates and judgments and options for
closing the accounts, as well as the main changes in the scope
of consolidation;
p the effectiveness of the internal control and risk management systems;
p the audit of the consolidated and parent company accounts by the
Statutory Auditors;
p the independence of the Statutory Auditors. As such, it;
− examines in detail the fees paid by the company and its Group
to the Statutory Auditors and checks that the proportion of
these fees in the revenues of each audit firm will not affect its
independence,
− directs the procedure for selecting and reappointing the Statutory
Auditors,
− makes a recommendation on the Statutory Auditors proposed to
the General Meeting for commitment;
p issuing reports and recommendations to the Board of Directors on
the foregoing matters, not only on a periodic basis and at the balance
sheet date, but whenever a noteworthy event occurs.
Audit Committee activity in 2012
The committee met four times in 2012 and once in the first two months
of 2013. Each meeting was attended by the Executive Vice President,
Group Purchasing and Finance, the Director of Accounting, Tax and
Finance Information Systems, the head of Financing, Treasury and
Investor Relations, the head of Internal Audit, the head of Internal Control,
and the Statutory Auditors. The attendance rate was 83%. Minutes were
taken of each Meeting and subsequently sent to the Directors.
To carry out its duties, the committee has access to all the accounting
and financial documents it deems useful. It can also consult, without the
presence of the executives, the employees of the company responsible
for financial statements, cash flow and Internal Audit, as well as external
auditors. As provided for in the AFEP/MEDEF Code, the Committee can
also call on the services of external experts. The Committee may take
note of the observations of Statutory Auditors, without the presence
2
of company representatives, so as to ensure that they have access to
all the information and that they are in possession of all the resources
necessary to the exercise of their functions. The Statutory Auditors
present the Committee with a summary of their work and the accounting
options selected for the financial statements.
When examining the accounts, the Statutory Auditors provide the
Committee with a memo underlining key aspects in the consolidation
scope, results and accounting options selected. The Chief Financial
Officer also submits a memo describing risk exposure and the company’s
major off-balance sheet commitments. The main recommendations
of the Statutory Auditors give rise to an action plan and a monitoring
procedure.
The Committee reports on its work at the next following meeting of
the Board of Directors and informs the Board without delay of any
problems it may encounter. The deliberations of the Audit Committee
and the information communicated to it are extremely confidential and
may not be included in any communication pieces external to the Board
of Directors. However, this rule does not constitute an obstacle to the
mandatory financial informant requirements of listed companies.
The Audit Committee has recommended the renewal, for six financial
years, of the mandate of Mazars as Statutory Auditor and Thierry Colin
as alternate Auditor.
The Committee measures the effective contribution of each Director to
the work of the Board through his or her skills and involvement.
Minutes were taken of each Meeting and sent to the Directors.
REMUNERATION COMMITTEE
Composition of the Remuneration Committee
The Remuneration Committee, set up in 1989, was at February 19,
2013 composed of Patricia Barbizet, Chair, independent Director, and
Philippe Marien. Their biographies can be found in Chapter 2.1.1 of this
document.
The composition of the Remuneration Committee will be changed after
the Annual General Meeting of April 18, 2013, as Patricia Barbizet has
not requested the renewal of her directorship.
Rules of procedure of the Remuneration Committee
The Remuneration Committee is governed by rules of procedure that set
forth its tasks and duties. The rules of procedure are regularly modified
by the Board of Directors.
The Committee’s remit is to:
p propose to the Board of Directors the compensation for corporate
officers and the benefits of whatever kind made available to them;
p examine stock option plans for corporate officers and employees;
p make proposals for remuneration and incentive systems for Group
executives;
41
2
Chairman’s report
p submit to the Board of Directors the draft report required under the
French Commercial Code on:
− compensation and benefits of all kinds granted to the corporate
officers by the company and controlled companies,
− stock options granted to and exercised by the corporate officers
and the ten company employees receiving the highest grants,
− options granted to and exercised by employees of companies
that are majority controlled by TF1.
Remuneration Committee activity in 2012
The Remuneration Committee met twice in 2012 and once during
the first two months of 2013. The attendance rate was 100%. The
Committee met to review the launch of a new TF1 stock option plan for
Group management, which was presented to the Board of Directors on
May 14, 2012. The Committee also provided the Board with an opinion
on setting the compensation of TF1’s Executive Director. Minutes were
taken of each Meeting and sent to the Directors.
SELECTION COMMITTEE
Composition of the Selection Committee
The Selection Committee was set up on February 24, 2003. Since
April 19, 2012 it has been composed of Martin Bouygues, Chairman,
and Olivier Roussat, both non-independent Directors. Their biographies
can be found in Chapter 2.1.1 of this document.
Rules of procedure of the Selection Committee
The Selection Committee is governed by rules of procedure that set
forth its tasks and duties. The rules of procedure are regularly modified
by the Board of Directors.
The Committee’s remit is to:
p periodically examine questions concerning the composition,
organisation and operation of the Board of Directors and to make
recommendations to the Board;
p examine:
− possible candidates for directorships, ensuring that independent
persons sit on the Board of Directors,
− plans to create Board Committees and proposals concerning
their responsibilities and members,
− all measures to be taken to fill any executive posts that become
vacant.
Selection Committee activity in 2012
The committee met twice in 2012 and once in the first two months of
2013, with a 100% attendance rate. It gave its position on the composition
of the Board and recommended the appointment of Catherine Dussart,
replacing Patricia Barbizet, who has not requested the renewal of her
directorship, and that of Olivier Roussat, CEO of Bouygues Telecom,
hitherto standing representative of Société Française de Participation et
42
de Gestion – SFPG, which has not requested the renewal of its term.
Minutes of each Meeting were sent to the Directors.
GENERAL MANAGEMENT
In accordance with the law, the Board elects from among its members
a Chairman (a natural person) who organises and guides its work and
ensures that each component of the company is in correct working
order. The Board entrusts the general management of the company to
the Chair of the Board or to another natural person, Director or not, who
takes the title of Chief Executive Officer.
At its meeting on July 31, 2008, the Board put an end to the separation
of the functions of Chair of the Board and Chief Executive Officer and
appointed Nonce Paolini as Chairman and Chief Executive Officer. The
Board confirmed the non-separation at its meeting on April 14, 2011.
This decision is a factor of efficient governance, especially given the
organisation of the TF1 group, which relies on an Executive Committee,
which comprises the seven senior executives of the TF1 group and
meets weekly, as well as the Senior Management Committee, which
brings together the directors of each Group division and functional
directors and meets once a month. These Committees coordinate the
implementation of strategic policies and monitor the achievement of
objectives.
Limits on the powers of the Chief Executive Officer
In accordance with the law, the Chief Executive Officer is vested with the
widest powers to act on behalf of the company in all circumstances. He
exercises these powers within the limits of the corporate purpose and
subject to the powers expressly accorded to Shareholders’ Meetings
and the Board of Directors.
The rules of procedure of the Board list the decisions that must be taken
by the Board. These include the initiation of strategic focuses, business
plans and policy on financing the business units and the Group; the
approval of large and truly strategic transactions; the authorisation
of investments, organic growth transactions, external acquisitions,
disposals and internal restructurings that are considered as significant
at Group level, particularly if the transaction does not correspond to the
company’s announced strategy; the authorisation of major financing
operations through public offers; and the authorisation of the main
guarantees and major commitments.
In 2012 the Board of Directors approved the strategic investment
projects and all transactions, notably acquisitions and disposals, likely
to significantly affect the Group’s results, balance-sheet structure or risk
profile.
The Board of Directors meeting of February 15, 2012 authorised the
CEO for 1 year to give guarantees and endorsements in the name
of the company up to a total amount of €50 million. At the same
meeting, the Board authorised the CEO for 1 year to give guarantees
and endorsements in the name of the company to tax and customs
administrations in an unlimited amount. Both these authorisations are
valid for one year.
Chairman’s report
PROCEDURES FOR THE PARTICIPATION
OF SHAREHOLDERS IN THE GENERAL MEETING
MATTERS LIKELY TO HAVE AN IMPACT IN THE
EVENT OF A PUBLIC OFFER
Detailed procedures for the participation of shareholders in the General
Meeting are provided in Chapter 8.1, page 284 of this registration
document and annual financial report.
Matters likely to have an impact in the event of a public offer are
addressed in Chapter 6.1.8 on page 203 of this document.
2
43
2
Chairman’s report
2.2.2 Chairman’s report on internal control procedures
INTRODUCTION
BACKGROUND
The purpose of this report is to describe the internal control procedures
set up by the company. It covers TF1 SA as producer and broadcaster
of the TF1 channel, and also its role in coordinating and participating
in the oversight mechanisms of the subsidiaries over which it exercises
exclusive or majority control.
TF1 monitors the harmonisation of the main financial procedures of
the entire Group while respecting the specific characteristics of each
business to preserve appropriate analysis and responsive decisionmaking. It also implements risk identification procedures across its
scope of responsibility in order to establish appropriate procedures and
controls for each business-critical cycle. The TF1 group is particularly
sensitive to the importance of internal controls, especially concerning
accounting or financial matters, where reliability of information is crucial.
This report is compiled from information and analyses performed in
cooperation with the various contributors to internal control in TF1 and its
subsidiaries, resulting in a factual description of the control environment
and the procedures in place.
Coordinated by the Internal Control Department, the report has been
subjected to an approval process by the Finance and Legal Affairs
Divisions. It was also sent to the Statutory Auditors and subsequently
presented by the Chairman to the Audit Committee and to the Board
for approval.
INTERNAL CONTROL OBJECTIVES AND PRINCIPLES
To analyse its internal control system and prepare its report on internal
control procedures, TF1 has used since 2007 the internal control
framework published on January 22, 2007 subsequent to the work
carried out by the task force set up by the French securities regulator, the
AMF. The revision of the reference framework of the AMF took place in
2010, in particular in order to integrate the legal and regulatory evolutions
in terms of risk management, as well as the AMF recommendation
regarding Audit Committees.
According to that framework, which is compatible with the benchmark
of the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) used by TF1 in previous years, internal controls are
defined as a method to ensure:
p compliance with laws and regulations;
p enforcement of the instructions and policies of governance bodies;
p the proper functioning of the company’s internal processes,
particularly those concerned with safeguarding assets;
44
p the reliability of financial reporting (details of key controls can be found
in the “Application Guide on Control of Accounting and Financial
Information Published by Issuers”).
This system should also contribute to monitoring the activity, effectiveness
of operations and efficient use of the company’s resources. However, no
such system can provide an absolute guarantee of achieving targets and
overall control of the risks to which the Group might be exposed.
The TF1 group is committed to a process of continuously and
dynamically adapting its internal control system to its activities, with the
ultimate aim of assessing the system’s appropriateness and efficiency.
INTERNAL CONTROL: GENERAL PRINCIPLES
ORGANISATION AND OPERATING PROCEDURES
The basis for the general Internal Audit environment consists of the
Group’s corporate governance principles, its organisational structure,
notably as regards operating procedures, and widespread dissemination
of its values and rules.
Organisation
The organisation, composition and functioning of the Board of Directors
and specialised committees which assist it (the Audit Committee,
Compensation Committee and Selection Committee), as described in
the section of the report on the preparation and organisation of the work
of the Board of Directors, comply with corporate governance rules and
are conducive to effective internal controls.
The Board, under the authority of its Chairman, determines the
company’s policies and, with the help of the Audit Committee, ensures
that appropriate internal control systems are set up within the Group.
Key decisions, such as the acquisition of programmes (sport events
rights, contracts with major film studios, etc.) are subject to clear
approval processes, with decisions being taken by senior management
based on recommendations of the different ad hoc committees. The
Board is kept regularly informed.
As Chairman and CEO of the TF1 group, Nonce Paolini has line and staff
responsibility for implementing the strategy established by the Board of
Directors for Group activities. Specifically, he arranges for internal control
systems to be implemented in the Group. For this he is supported by the
Executive Committee, which comprises the seven senior executives of
the TF1 group and meets weekly, as well as by the Senior Management
Committee, which brings together the directors of each Group division
and functional directors and meets once a month. These committees
enable the CEO to pass along the key internal control policies and to
make executives accountable for implementing and monitoring the
internal control systems in their area of responsibility.
Chairman’s report
Powers are delegated on the basis of guidelines set by the Group to
achieve the twin objective of making operational staff accountable and
controlling commitments at the appropriate level. On the latter point the
company is organised in such a way as to allow for independent control
by separating operational functions from those involving the protection
of assets and accounting recognition of operations.
2
hiring, career management, training, communication and relations with
customers and service providers. TF1 published its second Diversity
Annual Report in 2012, addressing trade unions, staff representatives
and employees and assessing the effectiveness of Group efforts with
indicators on four key priorities: disability, seniors, gender equality and
ethnic diversity. In late 2012, an audit of compliance with Diversity label
specifications confirmed that TF1 had met its commitments.
Objectives
The three-year plan reflects the mid-term strategic policies and
determines the budget for the coming year. It represents the
commitments made by the managers of the various Group entities.
As such, this plan is also a key element of the internal control environment.
It defines the objectives in terms of sales levels and costs, as well as the
resources, entities and organisation to achieve those objectives.
The process of developing the three-year plan also implies a structured
approach aimed at ensuring the quality of the objectives. The approach
is organised by the TF1 Strategic Planning and Internal Control Division.
The plans from the various TF1 group entities and companies are
subject to a validation process chaired by the Finance Division (DGAAF).
A summary of these plans is presented to the Chairman and CEO
and to the TF1 Board. During the final quarter of the year, a document
summarising the whole of the TF1 group three-year plan process is
presented to the Board of Directors, which approves the budget.
Rules and principles
The TF1 group focuses on compliance with the rules and values
disseminated through rules of procedure (those of TF1 SA and of its
subsidiaries), operating guidelines, as well as through the Code of
Conduct used by the Bouygues group. In 2009 TF1 appointed the
General Counsel as the Group Ethics Officer charged with reporting
regularly to the Chairman on any problems encountered in business
practices, in collaboration with the Board of Directors, and developing
solutions appropriate the Group’s business lines. The Ethics Officer is
also responsible for responding to employees’ queries on these issues.
TF1 also adheres to the Code of Ethics of the Bouygues group, the aim
of which is to encourage managers and staff to adopt a common set of
values, including respect and a sense of responsibility for all. The Code
commits the Group to stringent standards of business conduct. It also
includes a whistleblowing mechanism to enable employees to point out
irregularities in certain pre-defined areas, of which they have become
aware in the course of their duties.
Similarly, in 2006, TF1 joined the United Nations’ Global Compact,
demonstrating its determination to adopt and promote respect for the
principles and values of human rights, environmental protection, working
standards and the fight against corruption. In 2010 TF1 became the first
media Group to be awarded the Diversity label, an accreditation given to
companies that take affirmative action to promote diversity and prevent
discrimination. The award, which is based on stringent criteria and
regularly monitored, constitutes formal recognition by an independent
body – AFNOR Certification – that TF1’s equality-promotion and antidiscrimination procedures are compliant and effective in the fields of
The industry in which TF1 operates is constantly changing, primarily as a
result of technological advances. TF1 therefore seeks to maintain a high
level of workforce skills through an ambitious programme of recruiting
and ongoing training that helps employees keep abreast of operational
requirements.
Furthermore the Bouygues Management Institute regularly organises
seminars in which TF1 executives participate. The objective is to
encourage managers to reflect on their role, responsibilities and the
respect of ethical principles in their daily work, and also to unite Group
senior management around common values.
Aside from the various control processes in place, the Group makes a
constant effort to continuously improve its internal control system.
Since 2007 the TF1 group has followed an approach initiated by
Bouygues for its main business lines, including TF1. The purpose is to
build an internal control system based on the AMF reference framework
and incorporating the best practices which, for the past several years,
the Group has committed itself to follow in each of its businesses. This
effort culminated in identifying and determining simple, measurable
principles covering the company’s key businesses. The system is based
around two main components:
p accounting and financial principles of internal control relating to the
coordination, organisation and preparation of financial and accounting
information; and
p general principles of internal control covering the five key elements of
internal control specified in the AMF reference framework.
This approach also involved establishing a structured organisation that
enables representatives from each business line to meet regularly to
organise the monitoring of the system and to adapt it in response to
regulatory requirements or when significant complementary principles
emerge from assessment campaigns. This common system has been
regularly supplemented since end-2008 by internal control principles
specific to TF1’s business and environment. This initiative is closely
linked to work on risk mapping, with the two processes reinforcing each
other.
The internal control system is assessed every year across a broad
spectrum that fully represents the TF1 group in terms of revenue and
the issues and risks inherent to its activities. The assessment campaigns
are based on rigorous and uniform self-evaluation methodology. In each
entity, the person normally in charge of the process establishes and
produces supporting arguments for the assessment, and then submits
it for approval by a person in a position to provide a critical perspective
on the outcome. The assessment has several components, including a
45
2
Chairman’s report
numerical four-tier scale, a description of the operating procedures, a
commentary on any discrepancies between operating procedures and
best practices, and action plans for addressing these differences.
The results of these campaigns are distilled to alert Senior Management
if a deficiency is detected in certain processes and to guide and prioritise
action plans. The results are also regularly presented to the TF1 Audit
Committee, which then reports to the Board.
The method, which is based on self-assessment, entails a decentralised
organisation involving many participants who assess the application
of the principles in their specific area of expertise, coupled with a
streamlined central organisation to consolidate and distil the results,
monitor action plans, disseminate the methodology and coordinate the
approach.
The aim of the assessment campaigns is to assess progress in applying
internal control principles over time, while limiting the subjective nature of
self-assessments. For this reason, the decision on the annual scope of
campaigns incorporates criteria relating to the representative/business
critical nature of entities, but also a monitoring criterion. Thus, an entity
that is covered by a campaign will be assessed over at least three years
to ensure this perspective.
New businesses are incorporated in the assessment campaigns in a
manner that reflects the gradual introduction of Group-wide processes,
tools and methods to control, steer and oversee activities within these
entities. Internal control campaigns show whether these processes have
been correctly implemented, in accordance with the deployment policy
described above.
In 2012, the assessment campaign covered common internal control
principles across a scope of representative and business-critical entities.
The scope comprised all Group companies where SAP software had
been deployed and whose commitment process, accounting and
payment procedures had been modified. The participation rate in the
2012 campaign was highly satisfactory, pointing to the natural and
progressive spread of the process.
The Group’s internal control principles have been made available to
the staff of the Finance Division on a collaborative portal containing
procedural guides and other materials with information for business lines,
as well as to all employees contacted in the context of the assessment
campaigns.
In 2012, working with the other businesses of the Bouygues group, TF1
used a tool for managing internal control campaigns and monitoring
action plans that enabled it to historicise, secure and systematise the
policy.
INTERNAL DISSEMINATION OF INFORMATION
To ensure that staff receive information on the Group and its development,
the Human Resources and Internal Communication Division distributes
a magazine, Regards, issued three times a year, and a monthly video
magazine called TF1 Inside.
46
In addition, an intranet portal, Déclic, helps employees understand the
environment in which they and the Group operate. It enables them to
obtain information on the Group (organisation, programmes, etc.) and
material about the audiovisual sector published in the press, and also find
out about opportunities for promotion and training, common operating
procedures, and the intranet sites of the other companies in the Group
or the parent company. It also features collaborative portals for each
function (Legal, Human Resources, Finance, etc.) in order to improve
networking and the dissemination of information. The tool also enables
managers to gather the information necessary for managing their teams,
notably on skills training or for preparing annual performance appraisals.
Other ways of passing on and sharing information on trends, topical
issues and Group strategy are the employee conventions organised from
time to time, the annual conference held since 2007, and the bimonthly
committee meetings of the TF1 group’s top managers.
The IT Department of TF1 SA’s Technical and IT Division, together with
the line and staff divisions, determines the information systems needed
to generate information and manage operations securely and efficiently.
TF1 uses both proprietary and off-the-peg software. Applications are
analysed, monitored and operated rigorously to ensure their availability,
integrity, security and compliance with legal obligations.
Work on applications for financial and accounting data is carried out in
close cooperation with the Accounting, Tax and IS Finance Division, the
Finance, Treasury and Investor Relations Division, the Strategic Planning
and Internal Control Division and the Management Control Division.
RISK MANAGEMENT
TF1’s risk management system has two major components:
p control of operational risk:
− a general approach to risk management focused on quality,
security, environmental factors and sustainable development.
Part of the framework established by the Bouygues group, TF1’s
approach involves two committees composed of representatives
of the Group’s business lines, which meet regularly to discuss
these issues,
− a business continuity approach initiated in 2004 specifically
targets the identification of major risks that could affect dayto-day business. The goal is to develop a decision-making
system for crisis management, along with a process for its
implementation. The initial work on this programme led to the
creation of the Réagir programme, which seeks to devise and
regularly update plans for restoring business-critical processes
after an incident. In 2009-2010, in addition to conducting regular
tests of processes and back-up tools, the Réagir plan was
updated to include an H1N1 flu scenario. In 2010 a business
continuity audit identified measures for improving the system,
which were implemented during the year. Particular attention was
paid to extending the processes covered by the back-up site and
Chairman’s report
broadening the scope of risk analysis to cover the activities of
TMC/NT1 and TMC Broadcasting. In 2012, steps were taken
to provide the back-up site with equivalent news production
tools as those of head office (PNS2) and to enhance the backup system for Eurosport channels, which is divided between the
London location and the TF1 back-up facility,
− an information systems security approach. For the past
several years, the IT Division has been formalising a data security
policy to set down common security standards for the Group.
This effort continues on a daily basis as the constant technology
advances are factored into security principles and rules;
p a system for mapping risks systematically:
Beginning in 2007 a working group composed of representatives
of TF1’s principal businesses started developing proposals to
improve the organisation and systems for risk management
and monitoring across all the businesses of the TF1 group. In
2008 the first stage – identifying and characterising the major
risks based on a methodology defined in collaboration with the
Bouygues group – was conducted through a series of interviews
with some 100 Group managers.
Since 2009, this initiative has resulted in the development of a risk
ranking system and an operational overview of the principal risks
to which the TF1 group is exposed. These risks are monitored
regularly through half-yearly committees involving each Group
entity and quarterly functional committees whose task, in addition
to identifying emerging risks, is to monitor the resources allocated
to risk mitigation. The Strategic Planning and Internal Control
Division coordinates these decentralised committees.
Based on the work of the operational committees involving Group
entities, the Group risk map lists the main events that could have
an adverse impact on the achievement of objectives over the
plan’s timeframe. The identified events are characterised and
scenarios prepared, their probability is assessed by those who
report them and their financial impact is measured to rank the
risk. Risk mitigation measures are reported separately according
to whether they are designed to lessen the likelihood of a risk
occurring or to mitigate its impact and according to their progress.
The main risks and the systems designed to control them are
described below in section 2.4 of this report, “Risk factors”,
which also describes the Group’s policies concerning insurance.
Financial market risks (interest rate and foreign exchange
risk, etc.) are also covered in paragraph 31 of the notes to the
consolidated financial statements of the present registration
document and annual financial report.
2
In early 2012 some 50 TF1 group managers attended a seminar
organised by the Bouygues group for its five business lines to
raise awareness about internal control and risk management
issues.
Procurement processes
Standardised procurement contracts allow TF1 to build a secure
framework for the supply of tangible and intangible products and the
related financial terms and conditions, guarantee service continuity and
ensure that suppliers subscribe to an insurance policy.
The development of framework contracts and supplier listing agreements
at TF1 group level has generated economies of scale and improved
management of the procurement and supplier-relation processes.
TF1 signs contracts for the purchase of broadcasting rights to
secure programming for future years. These contracts are legally
and economically complex and involve substantial sums. Investment
projects are initiated based on the channels’ editorial policies and the
requirements arising from an analysis of programme inventory; they
are subject to an investment authorisation procedure for each type of
programme.
Furthermore, and where possible, framework agreements are signed
ahead of the procurement process in order to control the costs of certain
programmes and to ensure supply. The Group centralises and shares its
multi-channel rights (freeview, DTT, cable and satellite, video and new
media including VOD and replay) as much as possible.
It was in this spirit that TF1 decided at the end of 2007 to create an
economic interest grouping, TF1 Acquisition de droits, in order to acquire
rights for the Group’s broadcasting companies. This was followed by the
creation of the Rights Acquisition and Trading Division (DGAAN) tasked
with optimising the circulation of rights within the Group. TF1 Acquisition
de droits and the DGAAN buy rights to feature films and series to meet
the needs of the Group’s channels and sell rights to programmes that
have not been used by the Group to third parties in order to optimise
inventory management.
Control of programme compliance
The programmes broadcast by the channel are subject to control by
the CSA under an agreement signed by the channel. Consequently
TF1 has set up a Programme Compliance Department which controls
programmes before they are aired. This effort, which in some cases
relies on advice from the General Counsel’s office, also helps to minimise
the legal risks inherent in broadcasting television programmes.
The main business risks that TF1 has identified and seeks to
cover on a constant basis are those linked to major processes,
i.e. acquisition and compliance control of audiovisual content,
and control of broadcasting and activities. The identification
and management of CSR risk are an integral part of the risk
mapping process: risks are identified, the impacts assessed, and
preventive and corrective measures implemented through entity
action plans.
47
2
Chairman’s report
Furthermore, programmes targeting children are submitted to
psychologists who are responsible for previewing the most sensitive
ones.
A TF1 Publicité team previews all advertising spots after receiving the
position from the advertising watchdog, ARPP. It ensures compliance
with the regulatory provisions concerning advertising messages on
multiple media. These controls focus among other things on:
p whether commercials comply with regulations and with the editorial
policy of the medium;
p the maximum duration of advertising slots, both daily and per hour;
p compliance with invoicing rules (in accordance with the Sapin Act 93122 of January 29, 1993).
Control of broadcasting and activities
TF1’s Technological and IT Division is responsible for making the
programmes assigned to it as well as for programme broadcasting and
the broadcast network. It is also in charge of designing, implementing
and maintaining technical and information systems, and for managing
real estate, logistics and corporate services.
The division guarantees broadcasting continuity by assuring that the
necessary human and technical resources are available and deployed
as needed.
For several years, the IT Division has also been responsible for managing
the identification, control and prevention of major risks that could
impact service continuity, in terms of signal broadcasting as well as the
company’s activity, premises and IT systems. As such, it analyses and
manages risks on an operational basis, for example through the Réagir
committee.
The company’s vital functions are included in the security plan through
a business resumption process, in particular for the departments
concerned with broadcasting, space selling, accounting, treasury,
payroll and IT operations. Procedures are tested from time to time so as
to upgrade the system if necessary.
The team in charge of this project also extended the range of risk factors
to include health risks that could hamper normal operations. These
risks have been quantified, their impact assessed, and the associated
safety procedures tested. In 2009 the skills, procedures and preventive
measures needed to address the threat of H1N1 flu were marshalled
under the Réagir programme.
Furthermore, a website and a toll-free telephone number enable
employees to be informed in real time in case of an emergency and to
keep in touch with the company where necessary.
CONTROL ACTIVITIES
In addition to the risk management mechanism, the TF1 group deploys
a number of processes and systems that contribute to implementing
senior management policies and enable goals to be achieved.
The Group pays particular attention to financial, legal and human
resources processes by focusing on the assignments carried out by
TF1 SA’s functional divisions. Each division supervises and assists TF1
entities in its fields of expertise. The divisions also disseminate crossfunctional procedures and ensure compliance with them, while helping
to approve specific procedures for the Group’s business lines.
Procurement and Finance Division (DGAAF)
The Réagir committee monitors and prevents major risks associated
with the Group’s key processes. It maintains and upgrades procedures
based on the principle of continuous improvement covering the security
of people, assets, infrastructure, systems and data. It also updates
and regularly tests plans for rapid resumption of activities that may
be discontinued as the result of an exceptional event such as a signal
outage or the inaccessibility of the TF1 building.
The DGAAF brings together the Group’s Financial Departments and
plays a supervisory role through the cross-functional procedures,
methods and principles it disseminates Group-wide. The DGAAF
was reorganised in 2012 to enhance medium-term visibility on Group
businesses, notably by distinguishing the process of medium- and longterm strategic planning from the short-term running of the company.
An external, secure back-up site has been operational since 2001 for
programme broadcasting, production of TV newscasts (TF1 & LCI) and
organising advertising slots for the TF1 channel.
The DPSCI supports Group senior management in setting mediumand long-term strategic objectives and establishes the framework
and resources to achieve these goals according to a timetable and
milestones determined with Group operational managers.
In 2006 this back-up facility was improved when a digital process
similar to that used at the main broadcasting facility was installed at
a new external site. This installation and the associated procedures
make it possible, if necessary, to switch over from the main site with no
noticeable interruption of programmes. In 2008 all back-up resources
were amalgamated at this single new external site. In 2011 an Internal
Audit was made of emergency procedures and new Group activities
48
joined the Emergency site (including Eurosport, Eurosport 2 and
EurosportNews).
Central Strategic Planning and Internal Control Division (DPSCI)
This exercise forms part of an annual cycle punctuated by strategy
workshops held over the course of the year. These workshops are
structured around the Group’s main medium- and long-term goals and
cover subjects suggested by operational managers.
Strategic planning is based on an analysis of market developments, uses
and the competitive environment, as well as the risk mapping approach.
Chairman’s report
2
The DPSCI performs strategy and competition monitoring, tracking
long-term trends in the media, internet and telecoms sectors, and within
this setting prepares scenarios of long-term trends and changes to TF1
group activities.
Group. The DCFSIF applies the principle that the tasks of ordering and
payment should be separate.
Once the strategic priorities are validated at the end of the first half
and Group senior management has aligned itself with these priorities,
strategic guidance memos are prepared and sent to all Group entities,
which use them to develop their three-year plans.
Since 2011 the DGAAF has had cross-functional structures in place to
coordinate its Financial Information System:
Preparation of the three-year plans is decentralised and conducted
at the level of each company and/or entity. The DPSCI organises and
coordinates these activities through a standardised process.
The first year of the strategic plan represents a firm commitment to senior
Group management on the part of the heads of the various entities. The
plan that is approved by the Board of Directors in the final quarter of
each year is updated when the strategic priorities are validated at the
end of the first half.
Each year, the DPSCI prepares a dossier for Standard and Poor’s, the
credit rating agency that rates the TF1 group. This dossier contains
market information and data about the medium-term financial
performances of Group entities as validated in the three-year plan and
updated based on the year-end financial statement.
The DPSCI is also in charge of internal control and risk management.
It is responsible for issuing warnings and strives to provide senior
management with the means to prioritise action plans. The DPSCI is also
responsible for ensuring that senior management receives exhaustive
risk information and that the Audit Committee and the Board receive
appropriate information about the major risks. It consolidates the main
findings of the internal control campaigns and summarises these for the
Group’s main governance bodies. It makes sure that the same methods
are used throughout the Group and that the approach is consistent with
the strategic planning process.
As such, the DPSCI bears, on behalf of the Finance Division, responsibility
for developing decision-support tools that will help to enhance control
of the Group’s business model and improve the ability to respond and
adjust to strategic guidelines.
Accounting, Tax and IS Finance Division (DCFSIF)
The DCFSIF is responsible for applying the Group’s accounting
principles. It guarantees the reliability of the processes used to collate
and process financial information, as well as the relevance and stability
of accounting methods.
It ensures that parent company and consolidated financial statements
provide a true and fair view of the activity of Group companies and
comply with existing standards and regulations. The DCFSIF ensures
that this information is supplied in the correct format and in a sufficiently
timely manner for effective use.
The DCFSIF includes the TF1 SA Accounting Department and the
Consolidation Department. It also gives functional guidance to the
subsidiaries’ Accounting Departments.
It helps to coordinate and constantly update the teams by setting and
disseminating rules, procedures and methods applicable throughout the
Project Management Finance and Procurement Division and Data
Management Unit
p a Project Management Finance and Procurement Division, to operate
and maintain all the applications making up the Finance-Procurement
Information System and monitor the implementation of the FinanceProcurement Information master plan;
p an SAP Data Management Unit, in charge of managing the Guidelines
databases of the Financial Information System, approving SAP
access rights, and strengthening the internal control of the accounting
and finance activities in the use of these applications.
Finance, Treasury and Investor Relations Division
The Finance, Treasury and Investor Relations Division is responsible for
monitoring all the financial resources of the TF1 group.
The Finance and Treasury Department manages the company’s
financing needs. It ensures that the Group has permanent, diversified
and sufficient sources of financing to meet its needs. It does this by:
p conducting analyses and regular updates of cash forecasts, which it
reports to senior management;
p maintaining sufficient lines of back-up financing with an average of
two to three years’ maturity, by establishing or renewing bilateral lines
of credit with banks, while optimising financing costs.
Finance and Treasury is also responsible for centralised management
of the Group’s cash and for cash movements between the subsidiaries
both in France and abroad, with the exception of a few entities over
which TF1 does not have exclusive or majority control. In this capacity,
it handles:
p management of bank accounts and optimisation of payment
instruments;
p management of the Group’s cash pool in euros and foreign currencies;
p consolidation and global management of interest rate and exchange
rate risks;
p delegation of powers to a limited number of employees who alone
are authorised by senior management to handle a limited number of
financial operations for all Group companies, based on authorisation
thresholds and procedures.
Finance and Treasury additionally oversees the terms for the issuance
of bank guarantees and maintains best practices in terms of financial
security and information systems. It ensures compliance with the basic
rules of prudent management adopted by the Group, particularly in the
areas of:
p internal security (two signatures for payments);
p external security (secure cheques, payment by promissory note);
49
2
Chairman’s report
p liquidity (confirmed credit lines, cash investment);
p quality of counterparties;
p legal documentation on credit agreements;
p assessment and hedging, where appropriate, of interest rate and
currency risks.
The Investor Relations Department ensures, through press releases,
press conferences, information items published on the Group website
(www.groupe-tf1.fr) and regularly organised meetings with financial
analysts, that the market and the financial community are kept
continuously and comprehensively abreast of the company’s latest
news and economic situation. This department is always listening to
shareholders, investors and analysts.
p the Management Control Division also prepares a weekly dashboard
to analyse TF1’s programming margin for previous weeks and the
current week.
Group Purchasing Division
The TF1 Purchasing Division is tasked with optimising the performance
of purchasing processes cross-functionally, in line with the Purchasing
Charter drawn up by the Bouygues group and through a TF1 group
purchasing policy based on six key components:
Financial disclosures are disseminated in strict compliance with market
operating rules and the principle of fair treatment for investors.
p a clear and objective purchasing process: purchasing decisions are
documented and clearly justified, and supplier offers are reviewed on
the basis of objective criteria established ahead of the tender;
This department is also in charge of coordinating the registration
document and relations with the Corporate Finance Division of the AMF,
France’s securities regulator.
p the global management of supplier relations: the Purchasing
Department is the unique entry point for suppliers, excluding
audiovisual rights, at the TF1 group;
Management Control Division
p a Responsible Purchasing policy that fosters diversity: TF1 encourages
extensive use of the sheltered sector and has its strategic suppliers
assessed on CSR by an independent body (Ecovadis). TF1 also
factors Diversity label criteria into its purchases and includes clauses
on sustainable development and diversity in most of its procurement
contracts;
The Management Control Division steers activities based on the Boardapproved budget. It ensures that the short-term milestones under the
Group’s medium- and long-term objectives are met, notably through:
p a monthly consolidated dashboard, which distils and annotates, at
Group level, key financial and operational items for Group entities,
along with events whose current or future impacts are explained.
This dashboard is prepared based on a monthly report prepared by
each structure and business, which includes a financial statement,
an end-of-year forecast, and performance indicators. Each entity
presents its own dashboard to the Management Control Division
in meetings scheduled according to a calendar established at the
beginning of each year. After controlling, validating and analysing
the presentations, the Management Control Division generates
a consolidated Group dashboard, which it presents to senior
management with comments.
Each quarter, the Management Control Division and the Accounting,
Tax and IS Finance Division jointly make sure that all income and
expense items for the period are properly attributed, either by having
teams share information or during meetings on the closing options;
p two updates to adjust estimates of year-end results and to re-orient
action plans in the light of the achievement of objectives;
p rolling forecasting to make monthly updates of the impact that events
and ongoing projects will have on end-of-year financial statements;
p about one hundred operational indicators reflecting short-term
management objectives for different activities and designed to
provide assistance for action plans. This set of indicators constitutes
the Group’s management ‘cockpit’. It serves as an instrument for
measuring performance, with the indicators regularly presented to
TF1 group senior management. This approach promotes common
50
and shared understanding of challenges and circumstances and
the development of cross-cutting solutions. It has been introduced
in most subsidiaries. These “cockpits” may be used to capture all
existing performance vectors at all levels of operational responsibility;
p ethics: the Purchasing policy is secure and TF1 is mindful of any
conflicts of interest that may arise during calls for tender. Particular
attention is paid to the reciprocal respect of contractual commitments
with our suppliers; also, in January 2012, the TF1 group signed the
Charter on Inter-Company Relations, which is supervised by the
government ombudsman;
p the implementation of framework contracts at TF1 group level,
notably through the formation of technical partnerships with strategic
suppliers;
p securing supply, assessing economic dependency risks and social
risks, and validating the respect of prevailing regulations, insurance
policies, etc.
Human Resources and Internal Communication Division
The Human Resources and Internal Communication Division plays a
key role in the selection, hiring, and development of human resources
necessary for the efficient functioning of the various TF1 group entities.
It monitors compliance with the French Labour Code and changes in
labour policy in conjunction with the various employee representative
bodies. It also coordinates the Group’s professional training, which has
the objective of developing the technical, interpersonal and managerial
skills required in the exercise of each employee’s responsibilities. TF1
cares about developing the skills of its staff and encourages job mobility
between Group companies and divisions. In 2012 nearly one out of
every two positions was filled through internal transfers (47%).
Chairman’s report
Within the framework of the management cycle, the Human Resources
Division, together with operational and functional departments, plans
human resources needs. These needs are formalised and are an integral
part of the three-year financial and strategic planning process fixed
by senior management. Any request to hire or promote a permanent
employee is subject to a formal approval procedure.
To disseminate best practices in the field of diversity to all TF1 group
companies and employees, two training programmes have been
launched. The first, introduced in 2010, is aimed at the 400 top
managers; the other, which was started in 2011, is for 400 journalists,
technicians and programme advisers who contribute to ensuring that
diversity is well represented on-screen. These two programmes were
completed in 2012 and will henceforth benefit new hires and promotions.
General Secretariat and Legal Affairs Division
The Group General Secretariat leads and coordinates the following two
functions:
p the General Secretariat, directly responsible for:
− monitoring relations with external bodies and authorities (such
as the CSA, the French competition authorities, government and
parliament, and the European Commission) with the Institutional
Relations and Regulatory Affairs Department,
− monitoring laws, rules and decrees concerning the audiovisual
sector, and in 2011 and 2012 in particular, the law on
compensatory channels and the consequences of its repeal,
2
− risk management, insurance and property matters: the DAJ
ensures that coverage is adequate and that premium and
deductible levels correspond to the risks in question.
For several years, the General Secretariat and Legal Affairs Division have
been involved in a process to secure and control commitments. This is
manifested, for example, by the definition of a Group contract policy and
standard contract models for all recurring commitments. Furthermore,
Legal Affairs pays particular attention to optimising and conserving
the insurance policies signed by TF1 and its subsidiaries so as to be
covered against the consequences of potential risks in partnership with
brokers acting for leading companies.
The Legal Affairs Division also monitors and participates in implementing
a consistent policy of delegation of powers. In particular, the subsidiaries
over which TF1 exercises exclusive control are granted delegations
based on guidelines established at Group level. With regard to
subsidiaries with joint control, internal control is organised based on
the TF1 group’s expertise and in compliance with agreements between
shareholders.
MONITORING SYSTEMS
Internal control systems must themselves be monitored continuously by
corporate management and by means of ad hoc assessments carried
out by bodies with no direct authority over or responsibility for the
activities in question.
Audit Committee
− monitoring the respect of regulatory requirements (production
obligations, CSA report, etc.) and competition requirements
(representatives following the acquisition of TMC and NT1),
Formed in 2003 the Audit Committee is composed of at least three
Directors. TF1 Executive Directors and employee representatives are
barred from sitting on the committee in order to ensure its independence.
− monitoring relations with inter-professional organisations in the
audiovisual sector (including SACD and USPA) and major interprofessional agreements (broadcasting, production),
Before making presentations to the Board of Directors, the committee
examines the quarterly, half-yearly and annual accounts and receives a
presentation of the conclusions of the Statutory Auditors. It takes this
opportunity to ensure the appropriateness and the consistency of the
accounting methods adopted to draw up the accounts and verify the
rules of procedure for the collection and control of the information used.
− the major concentration transactions having structured the
Group, with the competent authorities (especially CanalSat’s
purchase of TPS and the buy-out of TMC and NT1),
− coordinating all Group pay-to-view channels in their negotiations
with the main pay-to-view distributors and ISPs, and in particular
administrative procedures with CSA and the competition
authorities;
p the Legal Affairs Division (DAJ), responsible for:
− determining and supervising the application of policy on contracts
in the Group,
− monitoring the various aspects of company law (including
the secretariat of Board Meetings and General Meetings) and
development within the Group,
− court proceedings and litigation. Legal risks and litigation are
closely coordinated with the DGAAF to ensure that they are
properly reflected in the financial statements,
− the management of intellectual property rights (brands and
domain names),
In addition, it notes the conclusions of the Internal Audit assignments
and validates the Internal Audit annual work plan.
Interest rate and foreign exchange hedging policies are also presented
to the Audit Committee, along with the medium-term financing strategy
of the TF1 group (available credit lines, funding sources in financial
markets, etc.).
The Audit Committee is kept updated on the deployment of the internal
control system, the results of assessment campaigns, major risks
identified in the risk mapping process and follow-up on action plans to
address these risks.
The Statutory Auditors’ role is to ensure the fair presentation of
the company’s earnings and financial and net asset statements in
accordance with accounting rules and principles. In so doing, they
are made aware of the organisation and operation of the information
systems and internal control procedures with regard to accounting and
financial information, which they take into account in their audit activity.
51
2
Chairman’s report
Internal Audit
The TF1 group’s Internal Audit Department carries out assignments in
the different Group entities and in various areas (finance, operations,
organisation), except for assignments relating to the reliability, security
and use of information systems, which are the responsibility of the
central audit unit of the Bouygues group.
All these assignments follow an annual audit plan validated by the senior
management and the Audit Committee of the TF1 group. A progress
report on the plan, along with its main findings and recommendations, is
presented to the quarterly Audit Committee Meetings.
Assignments are carried out according to a rigorous methodology. They
result in a report containing recommendations, which systematically give
rise to action plans that are implemented by the audited entities. The
Internal Audit Department monitors this process.
Internal Audit therefore acts as an analysis, control and information tool
for senior management, executives and the Audit Committee, making
it possible to identify risks and to manage and control them more
effectively.
As part of its duties, Internal Audit verifies the application of internal
control principles and rules, in collaboration with the Strategic Planning
and Internal Control Division (DPSCI) and in addition to the latter’s
assessments. It thereby contributes to raising employees’ awareness of
internal control issues.
In addition, Internal Audit actively monitors best practices in control and
helps make employees aware of internal control principles.
PUBLISHED ACCOUNTING AND FINANCIAL
INFORMATION CONTROL PROCESSES
TF1 is particularly sensitive to internal control issues, particularly in the
areas of accounting and finance, where the reliability of information is
critically important.
This chapter summarises the principal control processes contributing to
the preparation of accounting and financial disclosures.
FINANCIAL INFORMATION SYSTEMS
The Central IT Division (DCSI) works closely with the DGAAF to deploy
and supervise the TF1 group’s major financial information systems,
notably the accounting, management, treasury and consolidation tools.
It also deploys business applications in certain entities.
In the areas of finance and accounting, TF1 operates specific internally
developed systems as well as packaged software. The latter are subject
to rigorous analysis, monitoring and operation to ensure their availability,
integrity, security and compliance with legal obligations.
In the broad framework of its Data Security Policy, the Group has set
up systems integrating technical firewalls against attacks from outside
(notably an anti-virus emergency plan and regular anti-hacking tests).
Since 2003 the TF1 group has embarked on a process to make the top
technical, legal and human resources managers aware of data security
and the systems they will need to use.
52
Finally, the increasing use of advanced information technologies makes
corporate data protection and confidentiality crucial. The Eticnet
guidelines take this factor into consideration; its dissemination and
regular updating help to strengthen the process of making employees
accountable.
At the end of 2008, TF1 launched an important project called SIGMA
aimed at facilitating and streamlining the preparation of information
while optimising processes in the areas of human resources, finance,
and purchasing. The project includes the replacement by SAP of all or
part of the applications formerly dedicated to these three functions and
the new Finance/Purchasing solution has been successfully deployed
at a number of entities (deployment in project mode to be completed in
2012). The Human Resources module for all TF1 group companies went
in to production in January 2010.
The SAP tool (ERP) is based on the principle of a unique record of
operations necessary for financial information and guarantees the
control of commitments and payments through:
p the approval cycle for commitments, pre-defined in the IT application
and limited to authorised persons;
p the sourcing of invoices reflecting the commitments duly approved
by the system.
This management tool is complemented and/or fed by several
applications that respond to different business needs of the Group, such
as the system dedicated to the processes for monitoring contracts on
the acquisition and management of broadcasting rights.
All the Group’s means of payment are subject to security procedures,
which are complemented by a banking interface, accounted for daily
and formalised monthly.
All payment instruments require two signatures, with an annual update
of proxies on all bank accounts.
With this approach, the aim of process optimisation is to enhance crossfunctional capabilities, harmonise the preparation of information, and
facilitate the analysis of the data for all the TF1 businesses.
PROCESS OF PREPARING AND CONSOLIDATING ACCOUNTS
The Accounting, Tax and IS Finance Division has a mission of monitoring
and co-ordination, regularly disseminating information to the Group’s
accounting staff on developments in the rules and methods for
generating the solo and consolidated financial statements of the TF1
group.
The tools and processes up-stream of the closing of the accounts
guarantee that events are accounted for correctly and according
to principles of reality, comprehensiveness, and correct accounting
representation.
The accounting choices made are validated by the Statutory Auditors
prior to quarterly closings and are presented to the Audit Committee.
Chairman’s report
Process for quarterly closing of TF1’s accounts
Each quarter, all of the companies in the Group prepare intermediate
accounts under IFRS using a structured process and a predetermined
timetable.
SAP software has a fully integrated flow management system that
enables using entities to observe details on results over time. For
other entities, using the Group’s management applications, quarterly
processing enables the accounting teams to validate and then
automatically generate book entries in the accounting software, thus
ensuring consistency between the results obtained from management
and accounting processes.
As part of the procedure for closing the TF1 accounts, book entries
are jointly analysed and validated by the accounting and management
control departments. Periodically, the management data used for
reporting are compared with accounting system data.
The Accounting, Tax and SI Division ensures compliance with the
process for handling different types of assets in Group accounts. For
goodwill and securities recorded on the balance sheet, it identifies
impairment indicators for intangible assets and, where necessary, writes
down the assets concerned. This is done whenever necessary and
at least once a year, based on information provided by the Strategic
Planning and Internal Control Division and various operational entities,
using the impairment test procedure described in the notes to the
Group’s financial statements. The value of other assets, such as
audiovisual rights, is assessed using criteria which are also described
in the notes to the Group’s financial statements. This process and its
results are validated together with the Statutory Auditors and presented
to the Audit Committee.
Provisions for litigation and other risks are established based on a
risk analysis conducted in consultation with the DGAAF, the General
Secretariat, the Legal Affairs Division, Human Resources and the
operational and functional departments concerned.
All items in the balance sheet and income statement are rigorously
analysed by comparing them with the year-earlier period. Changes
are commented upon, and those comments provide insights into the
companies’ businesses.
Off-balance sheet commitments (guarantees given and received by
the Group, reciprocal commitments such as rental, lease and image
transmission contracts) are subject to stringent procedures governing
establishment, authorisation, monitoring and assessment in every Group
entity. Commitments made to secure programming are described in the
notes in the sections that deal with the relevant balance sheet items.
They are covered by specific negotiation and authorisation procedures
involving the DGAAN, the Broadcasting Division and the DGAAF, and are
2
also subject to assessment procedures carried out by the DGAAN under
the DGAAF’s supervision (financial and management control).
Consolidation process
The Consolidation Department consolidates all TF1 group companies
at each quarterly closing on the basis of a pre-defined scope, schedule
and instructions communicated to the Group’s organisations and units
and the Statutory Auditors.
Since January 1, 2005 the TF1 group accounts have been prepared
in compliance with IFRS, which have been adopted by the European
Union. Depending on local standards and tax regulations, a parallel
treatment of certain transactions is provided in the solo accounts of
certain Group subsidiaries.
The consolidation tool used throughout the TF1 group is SAP-BFC,
an application used by a large number of listed companies. SAP-BFC
allows for rigorous analysis and control of the account preparation
process, which is governed by standard procedures.
PROCESS FOR VALIDATING THE ACCOUNTS
The quarterly consolidated financial statements are presented to the
Chairman and CEO by the DGAAF.
At December 31 of each year, the accounts of TF1 and all its subsidiaries
are audited by the Statutory Auditors. Each quarter, the consolidated
financial statements are reviewed.
Before presentations to the Board of Directors, the Audit Committee
reviews the consolidated financial statements and receives a
presentation of the conclusions of the Statutory Auditors. Subsequently,
the Group accounts are presented and closed by the Board of Directors.
In addition, the Audit Committee reviews the proposed announcement
of the quarterly results prior to validation by the Board of Directors and
release.
PROCESS FOR MANAGING FINANCIAL DISCLOSURES
Besides the Chairman and CEO, only duly authorised persons may
communicate financial information to the market. These include the
Executive Vice President for Procurement and Finance, the Corporate
Communication Division and the staff of the Investor Relations
Department.
This department prepares reports on the business and financial results
of TF1 and its subsidiaries for the Board of Directors.
These documents are drawn up according to a structured process
which satisfies the requirements concerning financial information, using
data from the Group’s subsidiaries and departments.
53
2
Chairman’s report
Before being
by the Legal
Development
releases are
Directors.
distributed, the documents are inspected and approved
Affairs, Human Resources, Communication, Sustainable
and Procurement & Finance Divisions. Quarterly press
approved by the Audit Committee and the Board of
The Investor Relations Department distributes and communicates
financial information on the TF1 group and its strategy through, for
example:
p management reports of the Board of Directors;
p registration documents, quarterly and half-yearly financial reports;
p financial press releases;
p presentations for financial analysts and investors.
Before being submitted to the AMF in compliance with its General
Regulation, the Group registration document is checked by the
Statutory Auditors, who make sure that the information on the accounts
and financial position is consistent with historical data, and who review
the entire document.
Each subject to be communicated is accompanied by an explanation
approved by senior management, updated regularly and acting as a
support to relations with the various stakeholders in the market.
To guarantee investors equal access to information, the various
communications products are also made available in English and
distributed through the following channels:
p information for an outside audience, once published, is put on line on
the www.groupe-tf1.fr website. Anyone desiring this information can
also request it from the Investor Relations Department and obtain it
free of charge;
p financial press releases are published in a national business daily,
on a mainstream financial website and on the AMF website. As of
January 2007 TF1 complies with the European Union’s Transparency
Directive covering new reporting obligations;
p meetings with analysts are broadcast live and in full on the Internet
or by telephone, with no access restrictions. A recording of these
meetings is posted on the Group’s website;
54
p two people from the TF1 group attend meetings held abroad and
talks with market participants to ensure that accurate information
is delivered with strictly equal access. The documents presented at
these meetings are published promptly on the www.groupe-tf1.fr
website.
CONCLUSION AND OUTLOOK
Throughout 2012, the TF1 group continued to reorganise its key business
processes, including rights acquisition and purchasing, to make them
more efficient and flexible and achieve greater cross-functionality among
the Group’s entities. These efforts culminated in a major project to
install a shared IT tool for the human resources, finance and purchasing
functions. This project involved teams from the business areas and from
the IT and technical functions and seeks to facilitate and streamline the
preparation of information while optimising Group processes in the areas
of human resources, finance, and purchasing.
The new finance and purchasing software came into service at a range
of Group entities including TF1 SA, TF1 Publicité and LCI in 2011,
followed by Eurosport, Téléshopping and TF1 Entreprises in 2012, after
the rollout of the human resources module across the Group in 2010.
Also in 2012, the Group conducted a new campaign to assess the
application of internal control procedures across a representative scope,
with highly satisfactory participation rates. The Group continued the
drive to enhance its internal control system by identifying good practices
for its different businesses.
TF1 also pursued its risk mapping activities in 2012 by updating,
reassessing and prioritising the risks identified in previous years.
New risks that could potentially affect the Group’s ability to reach its
medium-term objectives were taken on board, while the processes
of administering action plans were incorporated into the company’s
management cycle.
The Audit Committee was regularly informed of these activities.
All these objectives will be pursued with a view to maintaining a
dynamic vision of internal control, based above all on the skills, sense of
responsibility and involvement of all Group employees.
2
2.3 REPORT ON REMUNERATION
Report on remuneration in accordance with Article L. 225-102-1 and L. 225-37 paragraph 9 of the French Commercial Code.
This chapter contains the reports required by the French Commercial
Code as well as the tables recommended in the Code of Corporate
Governance issued by AFEP/MEDEF in December 2008 and in the AMF
Recommendation of December 22, 2008 on the information related to
the remuneration of Directors of listed companies to be included in their
registration document.
2.3.1 Remuneration of executive and non-executive directors
REMUNERATION OF THE EXECUTIVE DIRECTOR
FOR 2012
These objectives have been drawn up in a precise manner but for
reasons of confidentiality are not disclosed.
Following consultation with the Remuneration Committee, which takes
into account the AFEP/MEDEF recommendations on the remuneration
of Executive Directors of listed companies, the Board of Directors
determines the criteria for allocating the variable portion and decides
on the amount of remuneration to be paid to TF1’s Executive Director.
The theoretical level of the variable portion has not been changed.
Depending on their nature, these bonuses are individually weighted
and capped. Overall, the variable remuneration corresponding to
the aggregate value of these bonuses is capped at 150% of fixed
remuneration.
As a reminder, Nonce Paolini earned:
FIXED REMUNERATION AND BENEFITS IN KIND
Nonce Paolini
The fixed remuneration paid to Nonce Paolini stood at €920,000 in 2012.
Fixed remuneration is determined according to the level and complexity
of the person’s responsibilities, his experience in the post and his length
of service with the Group, as well as the practices followed by the Group
or companies carrying on similar businesses.
The in-kind benefits received by Nonce Paolini in 2012 remain
unchanged, consisting of the use of a company car and the part-time
assignment of a personal assistant and a chauffeur/bodyguard. The
benefits are valued at €5,037.
VARIABLE REMUNERATION
Nonce Paolini
Nonce Paolini’s variable remuneration for 2012 is based on the
performance of the TF1 and Bouygues groups, which is measured on
the basis of significant economic indicators that are stable and relevant
over the long-term, namely:
p quantitative:
− trend in consolidated net profit attributable to the Bouygues
group,
− trend, compared to the business plan, in consolidated net profit
attributable to the TF1 group,
− year-on-year trend, in consolidated net profit attributable to the
TF1 group;
p qualitative, a greater importance to qualitative criteria has been
granted, on the grounds that the performance of senior managers
extends to areas other than simply financial results. These criteria
depend both on the duties assigned to the manager and on special
situations.
p in 2009, 73% of the theoretical cap on variable remuneration;
p in 2012, 50% of the theoretical cap on variable remuneration.
Nonce Paolini’s variable remuneration for 2012 amounted to €460,000.
OTHER INFORMATION CONCERNING REMUNERATION
AND SUPPLEMENTARY PENSION
Nonce Paolini
Nonce Paolini’s fixed and variable remuneration is set by the TF1’s Board
of Directors, in line with Article L.225-53 of the French Commercial
Code, following an opinion from the Remuneration Committee. The
remuneration is paid to Nonce Paolini by Bouygues and re-invoiced
to TF1.
TF1’s Board of Directors authorises the re-invoicing of this amount.
Under a policy governed by the French Insurance Code, Bouygues offers
the members of its Executive Committee a supplementary pension set
at 0.92% of the reference salary (average of three best years) for each
year of membership. Nonce Paolini is a member of that committee. The
supplementary pension is capped at eight times the upper earnings limit
for social security contributions.
Bouygues re-invoices this supplementary pension to TF1 under a
regulated agreement.
Lastly, Nonce Paolini does not benefit from payments, benefits in kind or
advantages owing or likely to owe from any discontinuation or change
in function. No payment relative to a non-compete clause has been
planned.
55
2
SUMMARY OF REMUNERATION OF THE EXECUTIVE DIRECTOR
No remuneration other than those mentioned in the table below has been paid to the Executive Director by the companies of TF1 and Bouygues.
TABLE 1 – SUMMARY OF REMUNERATION, BENEFITS IN KIND AND STOCK OPTIONS GRANTED TO THE EXECUTIVE DIRECTOR
Nonce Paolini – Chairman and CEO since 01/08/2008 (in euros)
Remuneration paid for the year (details in Table 2)
Value of options awarded during the year (details in Table 4)
Value of performance shares awarded during the year (details in Table 6)
TOTAL
2012
2011
1,441,037
1,917,321
44,465
135,595
-
-
1,485,502
2,052,916
TABLE 2 – REMUNERATION OF THE EXECUTIVE DIRECTOR
Nonce Paolini – Chairman and CEO since 01/08/2008
(in euros)
2012
Amounts due
Amounts paid
Amount due
Amount paid
920,000
920,000
920,000
920,000
Fixed remuneration
Change
Variable remuneration(1)
Change
% Variable/Fixed
Cap
=
=
+31%
+31%
460,000
936,284
936,284
1,050,000
-51%
-11%
50%
102%
150%
Other remuneration(2)
Directors’ fees
2011
(3)
Benefits in kind
TOTAL
150%
-
-
-
-
56,000
56,000
56,000
56,000
5,037
5,037
5,037
5,037
1,441,037
1,917,321
1,917,321
2,031,037
(1) The variable remuneration to be paid in March 2013 to Nonce Paolini for his service as CEO in 2012 is €460,000, or 50% of fixed remuneration, reflecting the performance of the companies.
The variable remuneration for 2011 paid in March 2012 was €936,284 (102% of fixed remuneration), reflecting the performance of the companies.
The variable remuneration for 2010 paid in March 2011 was €1,050,000 (150% of fixed remuneration), reflecting the performance of the companies.
The cap chosen for these three periods is 150% of fixed remuneration.
(2) Nonce Paolini received no additional remuneration, either from TF1, Bouygues or TF1’s subsidiaries.
(3) In 2011 this comprised €18,500 for TF1, €25,000 for Bouygues, and €12,500 for Bouygues Telecom.
In 2012 this comprised €18,500 for TF1, €25,000 for Bouygues, and €12,500 for Bouygues Telecom.
FULL YEAR 2013
The Board of Directors meeting of February 19, 2013 decided that no
increase in fixed remuneration would be granted.
The theoretical level and attribution criteria or the variable share have not
been changed.
DIRECTORS’ FEES AND OTHER REMUNERATION
RECEIVED BY NON-EXECUTIVE DIRECTORS
The Combined Annual General Meeting of April 23, 2003 set the total
amount of Directors’ fees payable to the non-executive Directors and
Directors of TF1 at €350,000 annually, leaving it to the Board of Directors
to determine how this amount should be allocated.
Directors’ fees for 2012 were allocated as follows:
p to Directors: the theoretical fee for each Director is €18,500 per year,
of which half is allocated on the basis of his or her responsibility, and
half on the basis of the attendance at Board Meetings;
56
p to committee members:
− Audit Committee: €2,250 per member, for the first quarter, then
€3,000 per member, starting in the second quarter. The Board of
Directors has decided to increase the total amount to take into
account the broadening of the Audit Committee’s responsibilities
and skill sets, especially in financial communication risks. This
amount had not been reviewed since 2007,
− Remuneration Committee: €1,350 per quarter to each member,
− Selection Committee: €1,350 per quarter to each member.
Not all of the €350,000 available for Directors’ fees was used in 2012.
Directors’ fees totalling €254,605 were paid to Directors including Nonce
Paolini, as indicated below.
2
TABLE 3 – DIRECTORS’ FEES AND OTHER REMUNERATION PAID TO NON-EXECUTIVE DIRECTORS (IN EUROS)
Amounts paid in 2012
BARBIZET Patricia
Non-Executive Directors (in euros)
31,295
32,900
BERDA Claude
15,801
18,500
BOUYGUES Martin
21,587
23,900
BOUYGUES Olivier
16,958
17,343
DANON Laurence
28,208
24,093
(1)
13,417
-
MARIEN Philippe
35,150
32,900
PELISSON Gilles
15,417
18,500
PERNAUT Jean-Pierre(2) (staff representative)
14,645
12,718
LANGLOIS-GLANDIER Janine
(2)(3)
PETTON Céline / CHABIRAND Fanny
(staff representative)
POUYAT Alain(4)
ROUSSAT Olivier
TOTAL
(1)
(2)
(3)
(4)
18,500
18,500
6,626
23,900
18,501
16,187
236,105
239,441
Appointed as a Director on the recommendation of the Board of Directors on February 15, 2012.
Directors’ fees due to staff representatives were paid to two trade unions: CFTC (€14,645) and FO (€18,500).
Fanny Chabirand replaced Céline Petton as staff representative director on April 19, 2012.
Director whose term expired on April 19, 2012.
The only remuneration paid by TF1 to Martin Bouygues and Olivier
Bouygues were TF1 directors’ fees. The remuneration received in 2012
by Martin Bouygues and Olivier Bouygues is mentioned in Bouygues’
registration document.
The salaried Directors, Jean-Pierre Pernaut, Céline Petton and Fanny
Chabirand, received no exceptional remuneration in consideration of
their corporate office in TF1 group.
Directors’ fees paid to the Executive Director were as follows:
DIRECTORS’ FEES PAID TO THE EXECUTIVE DIRECTOR
Nonce PAOLINI
(1)
€56,000
€56,000(2)
TOTAL
€56,000
€56,000
(1) Of which 18,500 for TF1, €25,000 for Bouygues, and €12,500 for Bouygues Telecom.
(2) Of which 18,500 for TF1, €25,000 for Bouygues, and €12,500 for Bouygues Telecom.
2.3.2 Stock options and performance shares
Presentation required by Articles L. 225-184 and L. 225-197-4 of the
French Commercial Code
This chapter contains the reports required under the French Commercial
Code. It also includes the tables recommended by the AFEP/MEDEF
Corporate Governance Code of December 2008 and by the AMF
Recommendation of December 22, 2008 on the information to be
provided in registration documents concerning the remuneration of
Directors.
The Board of Directors awarded stock options in 2012, but no
performance shares were distributed.
57
2
POLICY ON GRANTING STOCK OPTIONS
AND BONUS SHARES (PERFORMANCE SHARES)
AUTHORISATIONS GRANTED TO THE BOARD OF DIRECTORS
BY THE ANNUAL GENERAL MEETING
The 28th and 29th resolutions of the Combined Annual General Meeting
on April 14, 2011 authorised the Board of Directors on one or more
occasions to allot stock options, calls and/or bonus shares, whether in
existence or to be issued in the future. This authorisation was given for
a period of thirty-eight months and requires the beneficiaries of these
shares to be employees and/or corporate officers of TF1 or companies
related to it.
To that end, the General Meeting delegated powers to the Board
of Directors to set rules for grants of bonus shares, with a view to
establishing closer links between senior executives and the performance
of the Group and its future and also the results of their work.
There are plans for a common ceiling set at 3% of the authorised capital.
The 28th and 29th resolutions on options and bonus shares provide that:
p the Board of Directors sets the conditions, notably the maximum cap,
for options or shares allotted to the Executive Directors, as well as the
performance criteria applicable to them;
p the Board of Directors draws up a list or determines the categories
of other beneficiaries of options or shares, and sets the criteria they
must fulfil.
p the managers benefitting from these plans are informed on insider
trading;
p a rule has been set that prohibits employees from exercising their
options or selling option shares in the thirty calendar days leading up
to release of the quarterly, half-year and full-year financial statements,
or the day of this release.
SPECIFIC RULES APPLICABLE TO DIRECTORS
The 28th and 29th resolutions on options and bonus shares provide that
the number of options granted to Executive Directors of the company
may not represent more than 5% of each of the allotments made by the
Board during this 38 month period.
The Board of Directors has incorporated the following AFEP/MEDEF
recommendations into its rules of procedure:
p stock options or bonus shares are not granted to senior executives
upon leaving the company;
p hedging the risk relating to the exercise of stock options or the sale of
bonus shares is forbidden;
p executives are obliged to retain a certain number of bonus shares or
option shares until their term of office expires.
Furthermore, the 28th resolution rules out any discounts. Depending on
the case:
This last provision was applied for the first time to stock options granted
in 2009. The Board decided to set the proportion of option shares that
Directors would be required to retain throughout their term of office at
25% (after selling the number of shares necessary to cover the cost of
option exercise and paying any related taxes or social charges).
p the subscription price of shares will be equal to or greater than the
average share price over the 20 days prior to their allotment;
It should be noted that options granted to the Chairman and CEO have
since 2009 been subject to performance criteria.
p the purchase price of shares will be equal to or greater than the
average share price over the 20 days prior to their allotment, or to the
average price at which they are purchased by the company, according
to Articles L. 225-208 and L. 225-209 of the Commercial Code.
GENERAL INFORMATION:
CHARACTERISTICS OF STOCK OPTIONS
The Board of Directors granted options entitling their holders to subscribe
for new TF1 shares, subject to company performance, in 2012.
All the stock options granted by the Board of Directors have the following
characteristics:
p exercise price: average of the opening prices quoted on the 20 trading
days prior to the option grant, with no discount;
RULES APPLICABLE TO GRANTS OF STOCK OPTIONS AND
BONUS SHARES
p validity period: seven years as from the date the options are granted;
It should be noted that:
p lock-up period:
p stock options or bonus shares are granted to attract senior executives
and employees and thereby to secure their loyalty, reward them
and give them a medium- and long-term interest in the company’s
development, in the light of their contribution to value creation;
p more than 150 employees benefit from each plan. The beneficiaries
are selected and individual grants are decided upon in accordance
with each beneficiary’s responsibility and performance, with particular
attention paid to potential high potential managers;
58
p no discount is applied to grants of options and shares;
− plan nos. 10 and 11: three years following the date the options
are granted (negotiable from fourth anniversary),
− plan nos. 12 and 13: four years following the date the options
are granted;
p exercise period: during the period after the lock-up expires;
p automatic cancellation if the employment contract or corporate office
is terminated, unless given special authorisation or in the event of
disability, departure or retirement.
2
p if performance is equal or superior to 70% and inferior to 90% of
objectives, the options may be exercised at the percentage of the
performance achieved in a linear manner;
p if performance is lower than 70% of objectives, no options may be
exercised.
STOCK OPTIONS GRANTED
OR EXERCISED IN 2012
The calculation will be made on the basis of the arithmetic average of
performances in 2012, 2013, 2014 and 2015 on a consistent basis,
compared with the budgets set in 2011, 2012, 2013 and 2014 for the
respective fiscal years of 2012, 2013, 2014 and 2015.
DETAILS ON THE SHARE SUBSCRIPTION
OPTION PLAN IN 2012
In 2012 the Board of Directors introduced a TF1 subscription option
plan, called Plan no. 13, granting options entitling their holders to
subscribe for new shares, subject to company performance.
The Remuneration Committee will review the fulfilment of performance
criteria on which the exercising of options depends.
The grant date was June 12, 2012. The number of options granted was
1,437,200 at €6.17, representing 0.7% of the authorised capital.
The Board of Directors will decide on the number of options that
beneficiaries may exercise from June 12, 2016, the first day after the
lock-up period.
The options were granted to 143 beneficiaries, senior managers or
salaried employees of the company or Group companies, belonging to
one of the three management bodies, excluding the Chairman.
EXERCISABLE STOCK OPTIONS
The exercise price of the options was calculated on the basis of the
average of the opening prices on 20 trading days (from May 15, 2012 to
June 11, 2012). No discount has been applied.
These options are valid for seven years after the date granted.
Exercise of the options is subject to performance conditions. The Board
of Directors has set the performance criteria, independently of each
other, that determine the number of options that can be definitively
acquired. Options are acquired depending for one half on the trend in
consolidated revenue on a consistent basis and for the other half on the
ratio of ordinary operating income to consolidated Group revenue on a
consistent basis.
For each criterion:
p if performance is equal or superior to 90% of objectives, 100% of the
options may be exercised;
In 2012, 3,000 TF1 options were exercised, as part of Plan no. 11, by
Group employees. They were exercised at €5.98, with no discount.
At February 19, 2013, there were no exercisable TF1 share subscription
options apart from those in Plan no. 11 (those no longer in lock-up
period and whose exercise price was lower at the date, than the market
price), or 1,728,889 shares in circulation (0.8% of the authorised capital).
OPTIONS TO SUBSCRIBE OR PURCHASE SHARES GRANTED
DURING THE YEAR TO THE EXECUTIVE DIRECTOR BY THE
ISSUER AND BY ANY GROUP COMPANY
In 2012 Nonce Paolini did not benefit from TF1 purchase or subscription
options. As such, he received no option subscription in Plan no. 13.
As part of his functions at Bouygues, in the 2012 fiscal year he received
options entitling him to subscribe new Bouygues shares, granted,
effective on June 13, 2012, by the Board of Directors of the Bouygues
company at a Meeting on April 26, 2012.
TABLE 4 – OPTIONS GRANTED TO THE EXECUTIVE DIRECTOR IN 2012
Name of
Executive
Director
Nonce Paolini
TOTAL
Plan number
and date
Bouygues Plan
Board Meeting date:
26/04/2012
Grant date:
13/06/2012
Nature of
options
(purchase or
subscription)
Valuation of options
according to method
used in consolidated
Adjusted
number of
options granted
during the year
Exercise price
Exercise period
Subscription
€0.4584
97,000
€20.11
June 13, 2016
to December 13,
2019
€44,465
97,000
The exercise price was calculated on the basis of the average of the opening prices quoted on the 20 trading days prior to June 13, 2012, with no
discount.
59
2
TABLE 5 – OPTIONS EXERCISED BY THE EXECUTIVE DIRECTOR OF TF1 IN 2012
No options were exercised by the Executive Director of TF1 in 2012.
SUBSCRIPTION OPTIONS GRANTED DURING THE YEAR
TO SALARIED DIRECTORS BY THE ISSUER
AND BY ANY GROUP COMPANY
The Board of Directors of TF1 granted, effective on June 12, 2012,
options entitling the beneficiary to subscribe new TF1 shares to a
salaried Director, owing to the person’s mandates and functions at the
company.
Name of salaried
Director
Plan number
and date
Jean-Pierre Pernaut
Plan no. 13
Board Meeting
date: 14/05/2012
Grant date:
12/06/2012
Jean-Pierre Pernaut, a salaried employee and Director of TF1, benefitted
from this plan. The company’s other salaried Directors did not in the
2012 fiscal year receive options granted by the companies linked to
the company under the conditions set forth in Article L. 255-180 of the
French Commercial Code or by companies controlled by the company
as provided for by Article L. 223-16 of the French Commercial Code.
Nature of
options
(purchase or
subscription)
Valuation of options
according to method
used in consolidated
Number
of options
granted
during the year
Exercise price
Exercise period
Subscription
€0.70
7,200
€6.17
June 12, 2016
to June 12, 2019
€5,040
7,200
TOTAL
PERFORMANCE SHARES
TABLE 6 – PERFORMANCE SHARES GRANTED TO THE EXECUTIVE
DIRECTOR
No performance shares were granted by the company in 2012.
TABLE 7 – PERFORMANCE SHARES THAT BECAME AVAILABLE TO THE
EXECUTIVE DIRECTOR DURING THE YEAR
No performance shares became available since none were granted by
the company to the Executive Director, Nonce Paolini.
STOCK OPTION ALLOCATION HISTORY AND OTHER INFORMATION
TABLE 8 – STOCK OPTION ALLOCATION HISTORY
Plan n° 10
Plan n° 11
Plan n° 12
Plan n° 13
Date of General Meeting
17/04/2007
17/04/2007
14/04/2011
14/04/2011
Date of Board Meeting
20/02/2008
18/02/2009
12/05 and
25/07/2011
14/05/2012
Grant date
20/03/2008
20/03/2009
10/06/2011
12/06/2012
2,000,000
2,000,000
1,500,000
1,437,200
to Directors
56,000
56,000
7,200
7,200
Nonce Paolini
50,000
50,000
0
0
Total subscription options granted
Jean-Pierre Pernaut
to the 10 employees receiving the highest grants
Total options granted subject to performance
6,000
6,000
7,200
7,200
340,000
340,000
272,000
302,000
0
50,000
1,500,000
1,437,200
Options exercisable beginning
20/03/2011
20/03/2012
10/06/2015
12/06/2016
Expiry date
20/03/2015
20/03/2016
10/06/2018
12/06/2019
€15.35
€5.98
€12.47
€6.17
Subscription price (euros)
rd
Exercise rules
Number of shares subscribed as of 31/12/2012
Total number of subscription or purchase options for cancelled, nonallocated or forfeited shares
Options outstanding at 31/12/2012
60
Exercisable on 3 anniversary.
Negotiable on 4th anniversary
Exercisable and negotiable
on 4th anniversary
0
14,111
0
0
241,000
257,000
63,200
12,800
1,759,000
1,728,889
1,436,800
1,424,400
2
The above options are currently the only instruments issued by TF1 that
have a potentially dilutive effect.
Earlier matured plans: Plan no. 1 lapsed on October 10, 2002, Plan no. 2
lapsed on April 8, 2004, Plan no. 3 lapsed on March 18, 2005, plan
no. 4 lapsed on September 20, 2006, plan no. 5 lapsed on December 6,
2007, plan no. 6 lapsed on December 11, 2008, plan no. 7 lapsed on
March 12, 2010 and Plan no. 8 lapsed on September 16, 2011. Plan
no. 9 on the allocation of free shares lapsed on March 31, 2010.
In view of the average TF1 share price in 2012, a dilutive impact has
been taken into account for Plan no. 11 and Plan no. 13.
The change in the number of currently valid options is presented in
note 32.2 in the notes to the consolidated financial statements of TF1 at
December 31, 2012. The cost of option subscription plans granted by
TF1 is presented in note 20.1 in the same annex.
TABLE 9 – STOCK OPTIONS GRANTED TO OR EXERCISED BY THE TEN TF1 EMPLOYEES (NON DIRECTORS) RECEIVING THE HIGHEST GRANTS IN 2012
Total number
of attributed
options/
subscribed
or purchased
shares
Average
weighted price
Maturity
Plan no.
302,000
€6.17
12/06/2019
13
3,000
€5.98
20/03/2016
11
Options granted during the fiscal year by the issuer, and any
company included in the scope of option allocation, to the ten
employees of the issuer and of any company included in this
perimeter, with the highest number of granted options.
Options held by the issuer, and the aforementioned companies,
exercised during the fiscal year by the ten employees of the issuer
and said companies with the highest number of options thus
purchased or subscribed.
2.3.3 Other information concerning the Executive Director
TABLE 10 – OTHER INFORMATION CONCERNING THE EXECUTIVE DIRECTOR
Employment
contract(1)
Yes
Nonce Paolini – Chairman and CEO
since 01/08/2008
No
X
Supplementary
pension plan(2)
Yes
X
No
Remuneration or benefits
due or likely to be due in
connection with relinquishing
or changing post(3)
Yes
No
Remuneration
related to a noncompete clause
Yes
X
No
X
(1) Nonce Paolini has an employment contract with Bouygues SA, not TF1 SA.
(2) See § 2.3.1 “Other information concerning remuneration and supplementary pension”. The annual supplementary pension entitlement, i.e. 0.92% of the reference salary (average of three best years)
for each year of scheme membership, is capped at eight times the annual upper limit for social security contributions (currently €290,976). This entitlement is acquired after ten years of service at the
Bouygues group and applies only to those who are at the Group when they take their retirement. Note that the Bouygues group does not have to set aside a provision for the supplementary scheme,
which takes the form of an insurance policy taken out with an insurer outside the Group. The annual supplementary pension has been brought within the scope of the regulated agreement procedure.
(3) Golden parachutes: neither the company nor its subsidiaries have made any commitment or promise to award severance pay either for the Executive Director. No commitment has been made on any
re-invoicing of such sums to TF1. No commitment or promise to award severance pay has been made for salaried Directors.
Since the Executive Director has an employment contract with the
parent company, he is subject to the collective bargaining agreement
for construction company executives in the Paris region. Nonce Paolini
is entitled to the remuneration provided for under that agreement if his
employment contract is terminated by Bouygues SA.
61
2
Risk factors
2.4 RISK FACTORS
The risk factors presented in this chapter are the following:
• authorisation to transmit and CSA sanctioning power,
p operational risks:
• risks related to public pressure on advertising and programmes,
− risk of losing key programmes,
• risks related to additional taxation and legal developments,
− risk of TF1 losing its leadership premium,
• risks related to the rights of individuals (privacy, slander, libel),
− risk of non-reimbursement of advances paid,
• risks related to intellectual property rights (copyright, related
rights),
− risks related to the economic crisis;
p industrial and environmental risks:
− industrial risks related to TF1 programme broadcasting: risk of
signal transmission interruption and non-execution risk,
− competition risks,
• risks related to the growth of Digital Terrestrial Television and
the development of internet and new media,
• risks related to radio spectrum developments (frequency
changes, 4G interference, second dividend);
• risks related to certain reality TV shows,
• risks related to competition rights,
− process of acquiring 100% of NT1 and Groupe AB’s 40%
shareholding in TMC;
p credit and/or counterparty risk;
p financial risks:
− liquidity risk,
− market risk.
p legal risks:
− risks related to regulation:
2.4.1 Operational risks
RISK OF LOSING KEY PROGRAMMES
Thanks to the talent of its creative staff and its privileged, long-standing
relations with French and foreign producers, TF1 has always provided
superior programming. These factors considerably reduce the risk
that TF1 will lose key programmes, which could result in decrease in
audiences and, in the pay-to-view television sector, strained relations
with the distributors of channels in a market that is increasingly limited to
a handful of players.
However, although the level of advertising revenue is correlated with a
channel’s viewership and audience share, the relationship is not linear. A
one-point decrease or increase in audience share does not necessarily
result in an equivalent variation in advertising market share or gross or
net advertising sales.
Particular attention is also placed on the arrival of new players in the
acquisition of television broadcasting rights for sports events, which may
change the current balance in the rights market.
RISK OF TF1 LOSING ITS LEADERSHIP PREMIUM
Thanks to its audience share, TF1 is the leading television channel in
France. This situation results in a leadership premium on the advertising
market. Losing this premium would have an impact on the results of the
Company.
62
RISK OF NON-REIMBURSEMENT
OF ADVANCES PAID
TF1 enters into long-term contractual agreements for major events
(for example, sports contracts) that require advance payment of
broadcasting rights. TF1 is thus exposed to the risk that such advances
will not be reimbursed if the event is totally or partially cancelled because
of force majeure. TF1 negotiates clauses covering the reimbursement of
advances and whenever possible considers the advisability of hedging
this risk.
RISKS RELATED TO THE ECONOMIC CRISIS
TF1 and its partners, like the rest of the global economy, were affected
by the 2009 economic crisis. The economic situation in 2012 and the
outlook for 2013 have led the Group to step up action plans aimed at
cutting costs and making its business model more flexible.
To cushion the impact of any future shocks to the economy and to be
able to react even more effectively in the event of another downturn,
the Group continued the reorganisation that was begun in 2008. New
processes have been introduced at Group level, some costs have
been made variable, and adjustments are constantly being made
to the business model. The Group pursued its efforts by preparing
and executing a plan to cut costs and adjust medium- and long-term
processes and organisations.
Risk factors
RISK MANAGEMENT POLICY
The TF1 group has put in place systems for monitoring and controlling
risk across all the Group’s activities. These risk management policies
are detailed in the report of the Chairman on Corporate Governance
and Internal Control in section 2.2, page 33 of the 2012 registration
document and Annual Financial Report.
With regard to operational risk, the TF1 group carries:
2
in an amount usually equal to the insured assets’ value. The policies
provide coverage for events involving acts of terrorism.
These contracts are taken out for the TF1 group by the Legal Affairs
Division with major insurance companies.
The deductible for each of these policies has been set according to the
risks incurred and the premium reductions offered to optimise the overall
cost of covering the Group’s risks.
p civil liability insurance covering the consequences of TF1 or its current
or future subsidiaries’ being found liable for damages caused to third
parties. The amount of coverage is based on the risks incurred;
p property damage insurance covering TF1 and its current and future
subsidiaries in France and abroad, wherever the TF1 group conducts
activities. This policy covers material damages to TF1 group assets
2.4.2 Industrial and environmental risks
INDUSTRIAL RISKS
TF1 PROGRAMME BROADCASTING – RISK OF SIGNAL
TRANSMISSION INTERRUPTION AND NON-EXECUTION RISK
TF1’s programmes are currently broadcast to French homes by:
p radio waves in freeview standard definition (SD) DTT via the 124 main
and 1,502 secondary transmission sites operated by TDF, TowerCast,
OneCast, and Itas TIM;
p radio waves in freeview High Definition (HD) DTT via the 124 main
transmission sites and 1,090 secondary sites operated by TDF,
TowerCast, OneCast and Itas TIM;
p satellite in freeview SD and HD digital on the Astra 1 position from
SES in the DTT SAT offering, and on Eutelsat’s Atlantic Bird 3 in
Fransat’s offering;
p cable in SECAM analogue in some networks;
p cable in SD digital;
p satellite in SD digital in the packages offered by CanalSatellite (SES
Astra 1) and AB (Eutelsat AB3);
p ADSL and fibre-optic cable in SD digital via all internet access
providers: Orange, Free, SFR and Bouygues Telecom;
p cable, satellite, and ADSL in HD digital simulcast via a growing
number of networks.
TDF is by far the leading national TV signal transmission operator, with
a network and technical resources currently unmatched by any other
company, particularly in terms of hosting on existing pylons.
TF1 is therefore dependent on TDF for signal transmission. Despite the
emergence of alternative transmission operators, TF1 cannot do without
TDF’s broadcasting facilities. As a consequence, if the TDF network
breaks down, TF1 cannot switch to other terrestrial transmission
systems to provide quick and economical coverage of its full broadcast
area.
Multi-platform radio wave transmission (SD DTT and HD DTT) and the
variety of alternative networks (satellite, cable, ADSL and fibre, the last
two of which are provided by several operators) will gradually reduce the
impact of any failures, since these networks are not connected to each
other and have separate staffs.
Broadcasting sites are generally reliable because of the redundancy of
broadcast transmitters. However, incidents can occur with the antenna
system (antenna, wave guides and frequency multiplexers), and the
power supply is not under TDF’s control, being the responsibility of EDF.
There have been disruptions of TF1 signal transmissions for technical
reasons such as transmitter failures or power outages. The contract
penalties are not commensurate with potential operating losses to TF1
during these incidents (including loss of audience, damage to TF1’s
image, reductions demanded by advertisers, and loss of merchandising
rights).
Lastly, since there are no back-up measures for TF1’s HD signal
transmission and since the signal is transmitted via TDF’s TMS terrestrial
network, disruptions in multiplex transmission to groups of broadcasting
sites are possible and happen periodically. The TMS network is currently
fully deployed, but continuity disruptions do persist, sometimes with
a major impact (> 1 million viewers). The introduction of back-up
transmission arrangements for TF1 HD will be reviewed ahead of the
discontinuation of TF1 DTT SD broadcasting. MR5 made a satellite
back-up commitment with the CSA that will start up in late 2014/early
2015.
Furthermore, the current labour climate brings a risk of malicious actions
that could have an impact on TF1’s broadcasting. There have been
several minor service interruptions at transmission sites in the past.
The loss that TF1 could incur in the event of a transmitter failure
is proportional to the number of television viewers served by the
63
2
Risk factors
transmitter. A failure in the Paris region (10 million viewers) could have
serious economic repercussions. For this reason, TF1 has negotiated
an agreement for its digital transmissions requiring TDF to intervene very
quickly in the event of a failure. TF1 has also requested reinforced backup measures.
p the gradual evolution in entertainment consumption behaviour due to
the development of Web-based media, whose revenues will grow in
coming years, in part from below-the-line budgets and whose nonlinear television consumption should grow at the expense of part of
our pay-television activities (pre-packaged programs);
In addition, the reallocation of frequencies with the deployment of
the new R7 and R8 multiplexers could have an impact on existing
multiplexers and cause local disturbances in Group networks.
p the growth of connected television, offering a new space that adds to
non-linear programme broadcasts with the arrival of powerful players
such as Apple, Google and Netflix.
INDUSTRIAL RISK MANAGEMENT POLICIES
The impact of these changes may also be heightened if the major
incumbent channels have to contend with more aggressive sales and
marketing policies as a result.
The Réagir Committee created in 2003 continues to work on monitoring
and preventing the major risks associated with the Group’s key
processes. It also updates and regularly tests rapid recovery plans that
may be triggered when an exceptional event results in an interruption in
signal transmission or loss of access to the TF1 building.
A secure external back-up site set up in 2007 is operational for
programme transmission, the production of newscasts (TF1 and LCI),
and the preparation of advertising spots for the TF1 channel. The
company’s vital functions are included in the security plan through
an alert and activity-resumption process. Besides real-time security,
numerous areas such as accounting, treasury, payroll, Eurosport, e-TF1
and IT are protected by multiple-level security systems. Procedures are
tested periodically so that the system can be adjusted, if necessary.
Broadcasting continuity is ensured 24/7, and an operations simulation
is performed every month.
In 2012, several exercices were carried out to check that the system
worked. They provided an opportunity to update the back-up systems,
particularly for news production (PNS2) and to check on execution of
improvements requested, either after Internal Audits or as part of the
extension of IT back-up arrangements.
No broadcasting incident necessitated the use of the back-up site
in 2012.
The Réagir system was expanded to include a preliminary monitoring
level – Réagir 1 – which is used to identify periods of increased risk (work,
events, live coverage, launch of services, software) and to extensively
communicate the associated information to the affected departments.
As with operational risks, TF1 carries insurance (both civil liability and
property damage) that covers some of the risks mentioned above.
COMPETITION RISKS
RISKS RELATED TO THE GROWTH IN DIGITAL TERRESTRIAL
TELEVISION AND TO THE DEVELOPMENT OF INTERNET AND
NEW MEDIA
Source: Médiamétrie.
The TF1 group operates in a constantly evolving competitive environment
in which changes have been accelerated by:
p the development of Digital Terrestrial Television (DTT) since 2005, and
the launch of six new channels at end-2012;
64
Moreover, the increase in the number of channels could lead to increased
competition on the rights market, particularly for powerful and attractive
content such as series.
The deployment of DTT has split the television audience among a
larger number of players. The audiovisual landscape is changing fast.
In January 2007, 40% of French households received multi-channel
offerings; by the end of December 2012, that figure had risen to 100%.
With the growth in freeview television offerings, it was normal to see
TF1’s audience share decline. However, the channel’s audience has
shown some resistance: while multi-channel offerings have increased
by a factor of four in eight years, TF1’s audience share for people four
years of age or older declined from 31.8% in 2004 to 22.7% at endDecember 2012. TF1 had 88 of the 100 most-watched shows in 2012.
Meanwhile, DTT’s aggregate audience share rose from 5.8% in 2007 to
22.0% in December 2012, a 16.2 points increase.
The ongoing risk of audience fragmentation facing TF1 will be reduced
by the Group’s move into DTT with the acquisition of full control of
TMC and NT1, and the launch of HD1, which will allow TF1 to make its
mark among the new DTT audience shares and limit the impact on its
premium channel.
With leisure time spent on entertainment – and television media in
particular – steadily increasing, the Group is consolidating TF1’s
leadership position by:
p building a consistent overall offering through its free channels and
powerful programmes;
p becoming a major DTT player through its holding in TMC (the DTT
leader and number-five channel in France in 2012) and NT1, and the
launch of the HD1 channel;
Risk factors
p optimising the acquisition of programmes for the premium and DTT
channels through a cross-cutting organisation that ensures the best
possible fit between the needs of the channels and procurement, and
the circulation of acquired rights in accordance with commitments;
p improving the Group’s control of the value chain through internal
production of part of its programming through the production
subsidiary (TF1 Production);
p establishing MYTF1 as a leading French media website.
TF1 is also present in the connected television market, with reasonable
investments, by signing partnerships with manufacturers, as well
as in new types of usage, by offering viewers interactive experiences
with flagship programmes on the premium channel such as Elections
Présidentielles 2012, Danse avec les Stars, Secret Story, The Voice and
Election de Miss France .
RISKS RELATED TO RADIO SPECTRUM DEVELOPMENTS
Following completion of the switch to all-digital in November 2011, the
radio spectrum remains exposed to changes that represent various risks
to TF1.
2
In the short run, the creation of R7 and R8 multiplexers has been
accompanied by changes in frequencies for all other multiplexers in each
of the 13 ramp-up phases. Continuity of reception for TV viewers is a
priority for TF1, which has had extensive dealings with the CSA to keep
step with these developments.
In the medium term, the arrival of 4G in the first dividend, which is
located in the band transferred to mobile phone operators, i.e. adjacent
to DTT, could create interference for TV viewers. Mobile phone operators
must take the steps necessary to avoid disrupting TV reception, notably
by installing filters.
Further out, the now openly discussed possibility of a second dividend
released from the spectrum allocated to DTT represents a major risk to
business and it is vital for TF1 to be part of the debate.
One risk related to the competitive environment is the reallocation of
frequencies to new players (e.g. reallocation to broadcasting of some
bandwidth from the digital dividend). The launch of a call for bids for the
R7 and R8 multiplexers in October 2011 led to the authorisation of six
new freeview digital HD domestic channels, including the TF1 group’s
HD1 channel. These channels were launched on December 12, 2012.
2.4.3 Legal risks
At the present time, there are no governmental, legal or arbitration
procedures, or other procedures of which the company is aware that
are pending or that threaten it that could have or have had over the
past twelve months a material impact on the financial situation or the
profitability of the company/Group.
REGULATION RISK
AUTHORISATION TO TRANSMIT AND CSA SANCTIONING
POWER
TF1 is a licensed audiovisual communications service. The company’s
initial authorisation to use frequencies for a period of 10 years starting
April 4, 1987 (Act of September 30, 1986) expired in 1997. Based on
decision 96-614 of September 17, 1996, the channel received an initial
five-year renewal of this authorisation, without a call for bids, effective
April 16, 1997.
The TF1 channel’s broadcast authorisation was automatically renewed
by the CSA for the period 2002-2007 on November 20, 2001. Under
the provisions of Article 82 of the amended Act of September 30, 1986,
this authorisation could be automatically extended to 2012 on account
of the simulcasting of the freeview digital terrestrial channel. In a decision
dated June 10, 2003, the CSA modified the TF1 authorisation and its
agreement to include the provisions relating to DTT broadcasting of the
programming.
A law passed on March 5, 2007 aimed at modernising future audiovisual
broadcasting included two automatic five-year extensions of TF1’s
authorisation. The first is compensation for the early termination of
analogue broadcasting on November 30, 2011, on condition the
channel is a member of a public interest Group implementing the
measures necessary for such termination. The second extension is on
account of the channel’s commitment to provide DTT coverage to 95%
of the French population. TF1’s term of authorisation therefore comes to
an end in 2022.
It should be noted that the TF1 group must meet a variety of general
obligations regarding broadcasting and investment in production, either
because of its Terms of Reference or regulations applicable to its activity.
A change to the regulations could add to current constraints on TF1,
with a possible negative impact on the company’s profitability.
If TF1 fails to meet its contractual obligations, the CSA can, after giving
formal notice, impose one of the penalties set forth in Article 42-1 of
the Act of September 30, 1986, i.e. fines; a temporary ban (not to
exceed one month) on publishing, broadcasting, distribution of service,
a category of programming, a part of the programming, or one or more
advertising slots; or the reduction of its broadcast authorisation period by
up to one year. TF1’s respect for these obligations is strictly monitored.
As such, it has created the Programme Compliance Department to
ensure that its channels respect the regulation in this area.
65
2
Risk factors
RISKS RELATED TO PUBLIC PRESSURE ON ADVERTISING AND
PROGRAMMES
this ruling, and the Paris appeals court is expected to hear the case by
the end of 2013 or early 2014.
The political treatment of certain social issues, such as violence or public
health, could prompt lawmakers to tighten legislation on advertising or
programmes. TF1 takes account of this situation in discussions with its
main partners and strives to keep step with these developments over
time in the best interests of stakeholders.
In contrast, in a ruling issued on September 13, 2012, the same court
found that the TF1 group had partial grounds to take action and had well
founded claims against Dailymotion, which as the host that continued
to be used by the platform, was accused of failing to promptly withdraw
content that had been placed there unlawfully and over which the
TF1 group held rights. Dailymotion was ordered to pay the TF1 group
€270,000 including legal costs. It was also served an injunction to
remove from its search engine keywords referring to TF1 and LCI. The
Group is considering appealing this decision as regards content for
which it was not deemed to have grounds to take action and therefore
did not see its case upheld.
TF1 endeavours to acquire the best programmes from its French and
international partners and broadcasts programmes that target a wide
audience. The programming, viewing and compliance teams pay close
attention to programming for younger audiences to minimise this risk. A
team from TF1 Publicité previews all advertising spots after obtaining the
opinion of the ARPP, and TF1 Publicité also checks to make sure that
commercials comply with the regulations and editorial policy.
RISKS RELATED TO ADDITIONAL TAXATION AND LEGAL
DEVELOPMENTS
Article 53 of the Act of September 30, 1986 calls for a complete end
to advertising on France Télévisions, the public service broadcaster, in
2012. An amendment to this article in the 2011 Finance Act deferred the
ban until January 1, 2016. In exchange for this postponement, the tax
paid by the channels to make up the deficit of France Télévisions was
lowered to 0.5% of their revenues, a rate that will apply until January 1,
2016.
This case illustrates the economic risk to which television channels
are exposed owing to the introduction of new taxes like the tax on
advertising investments.
In addition, 2013 may bring a new Bill amending the Freedom of
Communication Act of September 30, 1986. At this stage, it is impossible
to measure the positive and negative impacts of this new legislation.
RISKS RELATED TO THE RIGHTS OF INDIVIDUALS (PRIVACY,
SLANDER, LIBEL)
No case currently in progress presents a major financial risk for TF1.
RISKS RELATED TO INTELLECTUAL PROPERTY (COPYRIGHT,
RELATED RIGHTS)
The TF1 group has been the victim of pirating of content on which it has
rights. Legal action was taken in 2008 to put a stop to it and to claim
damages from media such as Dailymotion and YouTube. These cases
were originally brought before the Paris commercial court, but have
been transferred to the Paris crown court (Tribunal de Grande Instance),
which under amended laws is now the only court with jurisdiction over
copyright violations. The TF1 group was obliged to update its claims in
these two cases, as the alleged violations continued after the writs were
issued.
In a ruling on May 29, 2012, the Paris regional court found that the TF1
group was not entitled to take action against YouTube and that its claims
were more generally unfounded. The TF1 group has appealed against
66
RISKS RELATED TO CERTAIN REALITY TV SHOWS
Glem, which on January 1, 2009 became TF1 Production, TF1’s
audiovisual production subsidiary, is the defendant in a number of legal
proceedings concerning the programme Île de la Tentation. The plaintiffs
are seeking not only to convert the “participation contracts” into “work
contracts”, but also to be recognised as “actors”. In 2008 differing
rulings were handed down in these cases. In three of them, the Paris
appeals court ruled on February 11, 2008 that three contestants in the
programme were salaried employees of the producer, Glem, but said
they did not qualify for actor’s status. In its decision of December 22,
2008, the Saint Étienne industrial tribunal held that no work contract
existed.
Glem then appealed the three decisions considering the participants as
salaried employees.
In a ruling on June 3, 2009, the Court of Cassation held that there had
indeed been a work contract, but it rejected the appeals court’s finding
that there was concealed employment, as intent of concealment had not
been proven.
The industrial tribunal of Boulogne-Billancourt has also heard other suits
brought by contestants in other seasons of Île de la Tentation. There are
also suits targeting other programmes for which TF1 has acquired the
rights from external producers, such as Koh Lanta. Some of the plaintiffs
have named the channel TF1 (the purchaser of the broadcasting rights),
along with the producer of the programme, as possible “co-employers”.
The tribunal has handed down contrasting rulings. It has either (i) ruled
against the producer, but awarded relatively modest sums (a few
thousand euros per plaintiff), while rejecting the claims of “concealed
employment”; or (ii) referred the cases to arbitration. (iii) However, there
have been no adverse rulings against TF1 SA.
In decisions issued on September 15, 2009, the tribunal decided the
cases involving Koh Lanta in the same way as it had Île de la Tentation,
while ordering one of the plaintiffs, who had been declared the winner, to
repay TF1 the money he had received.
Risk factors
2
Several plaintiffs were dissatisfied with the monetary damages awarded
in the initial judgements and filed appeals.
Tentation and Greg le Millionnaire), but in studio-based entertainment
programmes, magazine programmes and drama.
The Versailles appeals court, under the terms of the November 9, 2010
judgements, assessed only the claims of contestants whose “employee”
suit was time-barred, but awarded them damages for the harm they
allegedly suffered because of the way in which the programme was
recorded. TF1 Production decided to appeal the decision. The court
handed down its initial rulings on April 5, 2011, in favour of the contestants
whose “employee” suit was not time-barred. After the conversion of their
participation contract into work contract, they were awarded damages
that were slightly higher than those of the time-barred contestants. The
court continued to refuse them actor’s status and did not consider TF1
as a co-employer. TF1 was thus systematically cleared.
Although the financial impact of these cases is not non-existent, it
remains relatively small with regard to the latest decisions, even taking
into account the rulings by the Versailles appeals court in December
2012 (the stance adopted by the court on this occasion concerns
only contestants from the last season of the programme produced by
TF1 Production). The claims made by the contestants are for the most
part very large (around €300,000 to €500,000 per person). The rulings
handed down to date, irrespective of the court, are thus very different
in scale from these claims, and thus have not called into question the
analysis made concerning the financial impact for the structure in this
type of dispute. Taking into account the suits currently underway, the
provisions set aside for litigation are consistent with the recent rulings.
These decisions were appealed both by the candidates and by TF1
Production. The Court of Cassation is expected to hand down its ruling
in early 2013.
On December 13, 2011 the Versailles appeals court handed down a series
of rulings on these disputes. Apart from those concerning programmes
produced by TF1 Production, which do not differ from those mentioned
above, the rulings notably concerned Koh Lanta contestants. The Court
also confirmed the conversion of the contestants’ participation contracts
to work contracts and awarded them sums of money as a consequence
of this conversion. However, the Court continued to refuse them actor’s
status and did consider TF1 as a co-employer.
In a ruling on November 13, 2012, the Boulogne industrial tribunal
refused to convert the contract of one participant in Le Royaume, a
programme produced by TF1 Production, on the grounds that the
programme was equivalent to a game (there can be no game without
rules) and that the relationship between this participant and TF1
Production did not therefore have the characteristics of a work contract,
which led the board to dismiss all the participant’s claims.
The current trend in judicial practice has already led the industry to
reconsider the conditions under which these reality shows are produced,
and this could affect the cost of these shows.
RISKS RELATED TO COMPETITION RIGHTS
It will be recalled that on January 12, 2009 TF1 received a statement of
complaint from the French Competition Authority relating to practices in
the pay-television sector.
A complaint was upheld against TF1 SA for anti-competitive practices
regarding the exclusive distribution of some of its themed pay channels.
In a ruling on November 16, 2010, the Competition Authority rejected
the complaint for anti-competitive practice on the ground that the
decision to authorise the CERES operation, whereby TF1 had granted
this exclusivity, constituted a vested interest for the parties.
Nevertheless, the Competition Authority decided to refer a number of
points to its investigative offices:
The Versailles appeals court has made several and different assessments
of the amounts allocated to participants.
p the definition of the relevant fibre-optic and catch-up television
markets;
Under the terms of rulings issued in summer 2012 (July 3, 2012), this
court awarded fairly modest financial compensation to the participants,
in the amount of €2,000 for contestants whose employee suit was timebarred (damage and interest & article 700) or €8,500 for contestants
whose suit was not time-barred. Six months later, in rulings issued on
December 11, 2012, the same court increased the award to time-barred
contestants in particular (€5,000) but also for the first time ordered
TF1 Production to pay additional damages and interest (€11,000) to
the participants of the last season of Île de la Tentation for concealed
employment, insofar as the court considered that at the time when the
programme was filmed (H1 2008), TF1 Production knew about the ruling
issued by the Paris appeals court on February 12, 2008 and therefore
intentionally maintained the participation contracts instead of work
contracts.
p a determination as to whether such exclusive agreements can have
the cumulative effect of locking up the pay-television market.
As far as the TF1 group is concerned, its subsidiary TF1 Production
is not specialised in reality TV (even though it has produced Île de la
Furthermore, in a decision on September 20, 2011, the Competition
Authority withdrew the authorisation for the 2006 TPS takeover by
Vivendi and Groupe Canal Plus for failure by Groupe Canal Plus to meet
several commitments made at the time. Following renotification of this
transaction, on July 23, 2012, the authority authorised, under injunction,
the CanalSat/TPS merger.
Groupe Canal Plus appealed this decision before the Conseil d’État. The
annulment of this decision and the obligations that it places on Groupe
Canal Plus, notably vis-à-vis publishers of independent theme-based
channels such as those of the TF1 group, could present a risk to the
business model of these channels when their distribution contracts are
renewed.
67
2
Risk factors
PROCESS OF ACQUIRING 100% OF NT1 AND
GROUPE AB’S 40% STAKE IN TMC
The TF1 group and Groupe AB signed an agreement on June 11, 2009
for the acquisition by TF1 of 100% of NT1 and Groupe AB’s 40% stake
in TMC.
The French Competition Authority approved the deal on January 26,
2010 on condition that TF1 complied with certain “behavioural
commitments”.
COMMITMENTS MADE BY TF1
The Competition Authority ruled on January 26, 2010 that the deal
would strengthen TF1’s position in the markets for rights and advertising.
To remedy the identified risks to competition, TF1 made a number of
substantial commitments to the Competition Authority.
The commitments were made as from the date of the Authority’s
decision to approve the deal and are to be implemented as of the formal
notification of the decision. They are made for a five-year period and
may be reviewed at TF1’s request or at the behest of the Authority in the
event of a substantial change in the de jure or de facto circumstances
prevailing when the Authority made its decision.
The commitments with regard to rights and audiences are aimed at
facilitating the circulation of rights for the benefit of competing channels
and to limit the rebroadcasting of programmes to no more than two nonscrambled channels.
TF1 has also undertaken not to engage in any form of cross-promotion
on TF1 of programmes aired on the acquired channels.
In the advertising market, these measures are intended to keep TF1’s
offer of advertising space independent from that of TMC and NT1. TF1
has undertaken in particular not to engage in any form of coupling,
subordination, rebates or quid pro quos between the advertising space
on TF1 and that on TMC and NT1. It has also promised that TMC and
NT1’s advertising space would be marketed independently by a different
company from the one that manages TF1’s advertising offer.
An independent, authorised representative of the Competition Authority,
ensures that these commitments are met.
The commitments have been posted on the Competition
Authority’s website at http://www.autoritedelaconcurrence.fr/pdf/engag/
10DCC11engagementsversionpublication.pdf.
Failure to abide by these commitments can result in the imposition of the
penalties specified in Article L. 430-8 of the Commercial Code.
The French audiovisual industry regulator (CSA) reviewed the acquisition
to determine whether it complied with the Freedom of Communication
Act of September 30, 1986. The CSA concluded that it did comply with
the rules restricting concentration in the Digital Terrestrial Television (DTT)
market and obtained commitments from TF1 to ensure pluralism and
programming diversity for the benefit of television viewers:
p some of the commitments made to the Competition Authority will
be included in the channels’ agreements for the same duration (no
cross-promotion; limitation of the rebroadcast of certain programmes
already shown on TF1 to one of the two channels; no bidding for
sports broadcasting rights for more than two non-scrambled
channels);
68
p commitments will be made in terms of audiovisual regulations for the
duration of the agreements (with a period review clause), including:
− the extension of TF1’s production obligations (Group agreement),
with the guarantee of original programming on TMC and NT1,
− the revision of NT1’s prime time slot, with noon-to-midnight
maintained in 2010 and a transition to 6pm-to-11pm starting in
2011,
− the obligation for TMC and NT1 to broadcast, respectively, 365
and 456 hours of original programming a year,
− the enhancement of NT1’s content with innovative programming,
cultural programmes and live entertainment,
− the early release of rights to audiovisual works on their last
broadcast,
− better accessibility to NT1’s programmes for people with partial
or total hearing disabilities.
The commitments made by the TF1 group to the two oversight
authorities do not diminish the economic or operational benefits of these
acquisitions, which make TF1 a leading player in freeview DTT.
The transaction between TF1 and Groupe AB was concluded on
June 11, 2010.
Métropole Télévision, part of the M6 Group, filed an interim appeal and
main appeal of the decisions of the Competition Authority and the CSA
with the Conseil d’État, France’s supreme administrative court. The
court rejected the interim appeal on April 22, 2010 and the main appeal
on December 30, 2010.
These decisions constitute final validation of the TF1 group’s acquisition
of TMC and NT1. The representatives of the parties are proceeding with
their remit. On January 26, 2010 the TF1 group set up the structures
and procedures needed to perform all commitments to the Competition
Authority.
The respect of the commitments made by TF1 to the Competition
Authority is regularly monitored by independent agents.
The independent agents have established procedures to be
implemented by the TF1 group to facilitate their task. After carrying out a
series of tests, they noted that the entire set of commitments had been
respected. Reports on these procedures and tests were transmitted to
the Competition Authority.
RISK MANAGEMENT POLICY
To manage legal risk, the TF1 group carries civil liability insurance to
cover the consequences if TF1 or its current or future subsidiaries
are found liable for damages caused to third parties. The amount of
coverage is based on the risks involved.
The Legal Affairs Division obtains this insurance for the TF1 group from
major insurance companies.
The deductible for this policy has been set according to the risks
incurred and the premium reductions offered to optimise the overall cost
of covering the Group’s risks.
Risk factors
2
2.4.4 Credit and/or counterparty risk
Credit and/or counterparty risks are dealt with in the present 2012 registration document and annual financial report in chapter 4, note 31, on
pages 147 to 153.
2.4.5 Financial risks
Financial risks, which are liquidity risks and market risks, are dealt with in the present 2012 registration document and annual financial report in
chapter 4, note 31, on pages 147 to 153.
69
70
DOCUMENT DE RÉFÉRENCE 2012
3
MANAGEMENT REPORT
3.1
2012 MARKET TRENDS
73
3.3
AFR
AVAILABLE INFORMATION
IN OTHER PART
OF THE REGISTRATION DOCUMENT 99
3.1.1 Television
73
3.1.2 The Internet and non-live viewing:
four access options
77
3.3.1 Risks factors and Report on remuneration
99
3.1.3 Advertising
81
3.3.2 Human resources and environment update
99
3.1.4 Regulation
84
3.3.3 Information concerning the TF1 company
and its capital
99
3.2
2012 ACTIVITY AND RESULTS
85
3.2.1 The Group
85
3.2.2 Outlook
95
3.2.3 Post balance sheet events
96
3.2.4 The role of TF1 vis-à-vis its subsidiaries
and relations with the parent company
96
3.2.5 The TF1 parent company
96
3.2.6 Principal acquisitions and divestments
97
3.4
STATEMENT OF COMPANY
OPERATIONS
OVER THE LAST FIVE
BUSINESS YEARS
99
71
3
MANAGEMENT REPORT OF THE BOARD OF DIRECTORS
Ladies and Gentlemen, Dear Shareholders,
We are assembled here today at the Ordinary General Meeting, as required by French law and by our Articles of Incorporation, to report to you on our
management during the past business year, submit the accounts for the 2012 business year for your approval, and review the situation and growth
prospects of the company and the Group.
This report also includes information on the social and environmental management of your company.
As in previous years, the accounts for 2012 are presented for both the TF1 group (consolidated accounts) and for the parent company,
Télévision Française 1.
The consolidated accounts have been prepared in accordance with IFRS standards, as adopted by the European Union (EU), while the accounts for
TF1 SA have been prepared according to accounting rules and principles applicable in France (French GAAP). The change made to the format of the
financial statement is indicated on pages 110 and 167.
These financial statements were approved by the Board of Directors of TF1 SA on February 19, 2013.
Post balance sheet events are disclosed in this chapter.
72
3
2012 market trends
3.1 2012 MARKET TRENDS
3.1.1 Television
Television remained a highly attractive medium for the French population
in 2012, both on a daily basis and for major events. The development
of new technologies is opening up more possibilities, with a continuous
improvement in TV set image quality, an ever increasing choice of
channels, and additional services alongside live viewing via the web and
companion screens.
HIGH PENETRATION OF TV SETS ENCOURAGES
CONSUMPTION(1)
Almost every French home now has a TV set: 98% have at least one,
and of these 50% have more than one.
After setting a sales record in 2011 with 8.7 million units, TV set sales
naturally trended downwards in 2012, to 6.7 million.
MULTI-CHANNEL ACCESS NOW THE NORM(1)
In fourth-quarter 2012, apart from the 1% of households receiving
television via analogue cable, all French households received at minimum
the 19 freeview DTT channels and 58% of them received a broader
channel offer via satellite, cable, ADSL or pay TV. This huge shift in the
French broadcasting landscape has happened quickly: at end 2006,
only 39% of homes with TV sets could access multi-channel offerings.
TREND IN MULTI-CHANNEL OFFER IN HOUSEHOLDS
WITH TV SETS
44%
45%
44%
44%
46%
45%
46%
48%
48%
49%
50%
55%
Television technology continues to modernise in French households.
81% now have a 16/9 set, and 80% a high-definition (HD) set, up six
points for the two functions in one year.
32%
While the attractiveness of video equipment continues to rise, growth in
audio equipment is relatively flat, with 15% of homes equipped with a
home cinema system.
35%
38%
40%
42%
44%
45%
47%
46%
47%
19%
17%
15%
11%
9%
7%
5%
4%
3%
55%
57%
43%
41%
1%
0%
47%
43%
22%
57%
2%
1%
42%
0%
T2 2009 T3 2009 T4 2009 T1 2010 T2 2010 T3 2010 T4 2010 T1 2011 T2 2011 T3 2011 T4 2011 T1 2012 T2 2012 T3 2012 T4 2012
SALES OF TELEVISION SETS, VOLUME
Broader offer (25 channels and over)
DTT offer (19 channels)
(million of units)(2)
Reduced offer (6 channels)
8.5
8.7
7.5
5.9
5.4
4.4 4.5
3.3
4.3 4.3 4.2
4.6
4.9
3.7 3.7 3.8
3.5 3.6 3.7
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
3.5
4.6
6.7
6.0
DTT is the most popular way of receiving television, with 59% of
homes having a DTT connection (i.e. an external or internal decoder
combined with a Yagi aerial). Since the end of the switch to all-digital,
this TV reception mode has declined slightly (by 1 point in one year), but
high-definition reception (HD DTT) is increasing at a brisk pace (45% of
households, up 11 points in one year).
ADSL/fibre optic ranks second. With 37% of homes connected, it
ranks far ahead of satellite and cable and remains the fastest-growing
reception mode, up 6 points in one year.
Satellite, the longest-standing reception mode, is stabilising (24% of
households, stable year-on-year), notably via pay subscriptions (13%,
stable), while free satellite is on the rise (12%, up 3 points).
Cable continues to decline (9%, down 1 point in one year), both for pay
offers (6%, down 1 point) and free offers (3%, down 1 point).
(1) Médiamétrie/GfK – Référence des Equipements Multimédias – October/December 2012 – Base: households with TV sets.
(2) GFK Retail & Technology – Annual sales (1990-2012).
73
3
2012 market trends
TELEVISION RECEPTION MODES
(% of households with TV sets)(1)
80
59.6%
49.7%
45.3%
40
35.8%
33.7%
37.1%
Free cable reception
Pay satellite subscribers
HD DTT reception
Pay cable subscribers
ADSL/fibre reception
DTT reception
T4 2012
T3 2012
T2 2012
T1 2012
12.8%
11.9%
5.8%
3.2%
T4 2011
T3 2011
T2 2011
T1 2011
13.2%
11.3%
6.5%
3.9%
T4 2010
T3 2010
T2 2010
T1 2010
T4 2009
T3 2009
T2 2009
T1 2009
T4 2008
T2 2008
30.8%
23.9%
22.8%
15.1%
10.6%
7.4%
3.5%
18.6%
15.3%
10.3%
8.0%
3.6%
15.6%
14.4%
10.4%
9.6%
4.1%
T1 2008
T4 2007
T3 2007
T2 2007
T1 2007
T4 2006
T3 2006
T2 2006
T1 2006
T4 2005
T3 2005
T2 2005
0
22.0%
14.7%
11.5%
10.7%
10.6%
5.2%
14.8%
11.4%
10.9%
9.4%
5.6%
5.0%
15.0%
11.2%
10.9%
5.0%
2.7%
2.5%
T3 2008
20
T1 2005
Evolution of penetration rates as a % of households
60.6%
58.6%
60
Free satellite reception
TELEVISION – THE TOP MEDIA CHOICE (2)
Overall, 81% of French people have at least one contact a day with
television, compared with 79% for radio and 43% for fixed Internet (via a
computer), giving television the broadest reach of all media.
Television also ranked highest in terms of time spent on media
consumption by French people during 2012. French people aged 15+
spent an average of 4 hours and 6 minutes a day watching TV, compared
with 2 hours and 15 minutes listening to the radio and 36 minutes surfing
the fixed Internet.
Television consumption continues to grow, setting a record in 2012
across all targets. For over 15s, consumption was up 4 minutes year
on year, compared with +3 minutes for radio and +4 minutes for fixed
Internet.
(1) Médiamétrie/GFK – Référence des Equipements Multimédias – October/December 2012 – Base: households with TV sets.
(2) Médiamétrie – Médiamat / 126.000 Radio / NetRatings –2012.
74
2012 market trends
3
TRENDS IN TELEVISION CONSUMPTION(1)
Individual viewing times for “Individuals aged 4 and over” and “Women under 50 purchasing decision-makers”.
3:56
3:58
WPDM-50: 3h58
+2' vs 2011 / +1%
3:36
3:39
P4+: 3h50
3:42
3:40
3:32
3:47
3:34
3:50
+3' vs 2011 / +1%
3:28
3:24
3:23
3:21
3:16
3:09
3:03
3:07
3:01
3:01
2:56 2:57
2:58
2:49 2:51
2:45
2:41
1990
1991
3:18
3:21
3:27
3:24
3:27
3:24
3:25
3:19
3:14
3:08
3:03
2:57
2:49
3:00
3:08
3:32
3:24
2:54
2:43
1992 1993 1994
1995 1996
1997
1998 1999
2000
2001 2002 2003
TV CONSUMPTION METHODS: CHANGING, BUT
SLOWLY(2)
New ways to watch TV are developing, but are still only marginal.
Only 2 minutes a day was spent watching live TV outside the home
(“anywhere” viewing), just 0.8% of the level of traditional live viewing.
For non-TV set devices (computers, smartphones or touchscreen tablets
– “any device” viewing) the average live viewing time was 1 minute a day,
or 0.4% of current live TV consumption.
2004 2005 2006
2007 2008
2009 2010
2011
2012
and viewing recordings made at home (timeshift viewing), included in
Médiamat statistics since January 3, 2011. Timeshift viewing upped
audience ratings by 1.9% (an extra 4 minutes and 26 seconds per day
for French people aged 15+). Over 44% of timeshift viewing is VOSDAL
(View on Same Day as Live).
The vast majority of DTT channels are now included in the Médiamat
national daily viewing statistics, the only exceptions being LCP, BFM TV,
i>Télé, D17, France Ô and the six new freeview DTT channels launched
on December 12, 2012.
In terms of non-live, or “anytime”, viewing, a distinction is made
between watching catch-up TV on sets, computers, smartphones and
tablets, amounting to 3 minutes a day or 1.1% of live TV consumption,
(1) Médiamétrie – Médiamat – Annual totals.
(2) Médiamétrie – Global TV – April/May 2012; Médiamétrie – Médiamat – YTD 2012.
75
3
2012 market trends
The charts below show how audience shares of the French channels are evolving in response to the explosion in the number of channels available and
the changes in the broadcasting landscape.
AUDIENCE SHARE – INDIVIDUALS AGED 4 AND OVER(1)
NRJ12
F4
22.0%
1.8%
11.2%
12.2%
11.6%
2012
BFM TV
i<Télé
D17
1.9%
2.1%
2.2%
1.2%
1.2%
1.0%
0.8%
0.8%
0.7%
Pay channels DTT channels
1.8%
1.4%
0.9%
Arte
2.1%
2.0%
1.6%
2.4%
2.3%
1.9%
M6
1.5%
1.6%
3.5%
3.3%
3.2%
2.9%
2.1%
F5
NT1
11.2%
10.4%
TMC
1.9%
1.6%
3.6%
C+
10.8%
18.3%
W9
3.5%
3.3%
3.2%
F3
3.1%
3.1%
9.7%
10.7%
9.7%
14.9%
14.9%
16.1%
D8
3.4%
3.0%
F2
2.3%
2.3%
2.0%
TF1
21.4%
2011
22.7%
24.5%
23.7%
2010
Gulli
NRJ12
F4
20.1%
24.5%
2012
0.9%
BFM TV
i<Télé
D17
Gulli
1.7%
2.1%
2.0%
1.4%
1.3%
1.3%
0.5%
0.5%
0.6%
Pay channels DTT channels
1.5%
0.7%
1.1%
Arte
2.6%
2.3%
1.8%
3.0%
M6
0.9%
0.9%
2.3%
2.2%
2.1%
2.5%
2.5%
2.8%
2.6%
2.6%
2.7%
4.0%
1.6%
2.4%
NT1
F5
2011
11.2%
11.7%
TMC
C+
11.1%
17.0%
17.2%
16.5%
W9
3.6%
3.9%
4.2%
F3
(1) Médiamétrie – Médiamat – Annual totals.
76
5.0%
6.0%
D8
5.1%
11.0%
12.0%
10.9%
3.9%
4.3%
F2
2.4%
2.0%
2.4%
TF1
23.2%
2010
25.5%
28.1%
26.7%
AUDIENCE SHARE – WOMEN UNDER 50 PURCHASING DECISION-MAKERS(1)
2012 market trends
3
3.1.2 The Internet and non-live viewing: four access options
PENETRATION OF INTERNET ACCESS AMONG
FRENCH HOUSEHOLDS(1)
Internet (a penetration rate of 75%, up 1.5 point on the fourth quarter
of 2011).
An ever-growing number of French people have Internet access: in
the fourth quarter of 2012, 20.4 million homes were connected to the
Broadband is by far the most popular means of access, accounting for
95% of households with Internet access (19.5 million households).
BROADBAND INTERNET ACCESS – HISTORICAL DATA 2001-2011
(Basis: 27.5 million French households)
20
+11%
Number of households (in millions)
+13%
+23%
+13%
10
17.6M
16.1M
12.7M
14.0M
9.5M
7.7M
9.5M
6.9M
6.2M
18.5M
15.0M
11.3M
+10%
+24%
+20%
Q4 2012 - 19.5M
(95% of connected households)
16.9M
+18%
+19%
Q4 2012 - 20.4M
(75% of French households)
18.8M
+13%
15
+5%
19.9M
11.9M
7.5M
5.1M
4.1M
5
2.2M
1.4M
0.7M
Q1 2001
Q2 2001
Q3 2001
Q4 2001
Q1 2002
Q2 2002
Q3 2002
Q4 2002
Q1 2003
Q2 2003
Q3 2003
Q4 2003
Q1 2004
Q2 2004
Q3 2004
Q4 2004
Q1 2005
Q2 2005
Q3 2005
Q4 2005
Q1 2006
Q2 2006
Q3 2006
Q4 2006
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q3 2008
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
0
Number of households with internet access
Number of households with broadband internet
Source: Observatoires Médiamétrie, REM, Q4 2012. Base: French households with TV.
INTERNET USE IN FRANCE(2)
TYPE OF INTERNET ACCESS
(Basis: 27.5 million French households)
72.9%
At end 2012, France had 41 million internet users (Individuals aged 11
and over), a penetration rate of 76% (up 3 points on December 2011).
74.5%
67.9%
71.0%
64.5%
69.1%
63.2%
65.6%
TRENDS IN PROPORTION OF INTERNET USERS
AMONG INDIVIDUALS AGED 11 AND OVER
Q4 2011
Q4 2012
71.4%
63.5%
76.4%
lu
ble
p
1.1% 0.2%
dia
Ca
SL
AD
x
Bo
an
db
Mo
de
m/
oa
Br
Int
er
ne
t
d
4.3% 4.2%
74.5%
65.0%
33,560
34,738
38,266
40,184
41,442
31/12/2008
31/12/2009
31/12/2010
31/12/2011
31/12/2012
Source : Observatoires Médiamétrie. REM. T4 2012.
Penetration
Users (000)
Source: OUI Médiametrie.
(1) Source: Observatoires Médiamétrie, REM, Q4 2012. Base: French households with TV.
(2) Sources: Panel NNR, December 2012, all connection sites. Observatoires Médiamétrie OUI, December 2012.
77
3
2012 market trends
The number of French web users continues to rise. The population is
spending more time on the Internet but visiting fewer different sites. In
December 2012 French web users went online an average of 57 times
in the month and visited an average of 112 different sites (compared
with 118 in 2011).
TRENDS IN MONTHLY USAGE PER UNIQUE VISITOR(1)
22.0
22.6
13.0
22.5
127
20.0
In December 2012 the average time spent online per month was
23 hours, compared with 22 hours and 28 minutes in December 2011.
22.5
137
135
118
112
89
62
56
54
59
58
57
Total number of sites
visited per month
Average time spent
on the Internet per
month (in hours)
36
25
0.5
2002
2005
Total number of
sessions per month
2008
2009
2010
2011
2012
RANKINGS OF WEBSITES IN FRANCE(2)
The TF1 group ranks 20th among all groups on the Internet in France, thanks to the performance of sites associated with the TF1 channel (MYTF1 and
TF1News) and pure player sites such as WAT, Plurielles.fr and Eurosport.
MYTF1 remains number one in the TV Media category with 10.4 million UVs. Eurosport.com ranks 2nd in the Sports category.
At Group level, the M6 group has overtaken TF1 with the integration of the Clubic brand and the purchase of Tom’s Games in November 2012.
TF1 the 20 th group on the web
1
Google
40.4 MUV
2
Facebook
32.3 MUV
3
Microsoft
25.6 MUV
4
France Telecom
23.2 MUV
5
Wikimedia Foundation 20.8 MUV
6
Groupe Lagardere
20.0 MUV
7
CCM Benchmark
19.8 MUV
8 Vivendi
19.0 MUV
9
18.9 MUV
Pages Jaunes
10 Iliad
18.2 MUV
Competition in television market
-5%
13.6 MUV
+11%
13.3 MUV
-6%
8.4 MUV
-1%
5.9 MUV
31/12/2011
31/12/2012
(1) UV: unique visitor. The total number of individuals having visited a website or used an app at least once in the period in question. Individuals having visited the same website or used
the same app several times are counted once only.
(2) Source: Panel NNR, December 2012, all connection sites, excluding web apps.
78
2012 market trends
3
NON-LIVE VIDEO CONSUMPTION
SOCIAL MEDIA TRENDS(4)
CATCH-UP TV(1)
Médiamétrie published the results of its second Social Networks survey
in July 2012.
Catch-up remained the most popular consumption mode for programme
viewing in 2012. As such, 80% of TF1 programming is available on
MYTF1.
In France, the average time spent per online video viewer in
December 2012 was 5 hours, up 1 hour and 30 minutes year on year.
The average number of videos watched was 89 per unique viewer.
France has 33.4 million online video viewers
In November 2012 Google/YouTube topped the rankings at 30 million
unique viewers; Dailymotion was second at 14 million. The brand
player(2) TF1/WAT attracted 10 million, putting it in third place in the
overall rankings and in second place in terms of total time spent, with an
average 1 hour and 45 minutes per video viewer per month.
VIDEO ON DEMAND – VoD(3)
The VoD market grew once again in 2012, reaching over €251 million
in consumer purchases, for a near 15% year-on-year increase. The
market grew 22% in terms of total consumer revenue excluding adult
programmes, on a consistent scope with the sector of physical video
transactions.
Awareness of VoD also rose once again in 2012, with nearly 9 in 10
French people saying they know about the service and nearly 1 in 3
saying they use it.
These increases are a result of the increased rate in the number of
households with ADSL, cable and fibre boxes, which rose 5 points year
on year to 70%, with an estimated 55% of households hooking their
boxes up to their TV sets (up 6 points on 2011). VoD has thus become
more visible and accessible for more VoD consumers on IPTV, a practice
that accounts for over 70% of total consumption in terms of value.
The most popular VoD programmes are recent cinema-release movies,
with a favourable market share for French films (especially in comedy),
which account for nearly 35% of films watched via VoD (compared with
24% of DVD and Blu-ray purchases).
The main finding was that the social networks are an immense success.
A full 99% of web users know of at least one social network, 77% are
registered users and 1.6 million users signed up in the last year. With the
complementary fit between the networks, web users join not one but
several, depending on what they want to do. Users are connected at all
times, out and about and even at their workplace.
Twitter made the biggest increase in 2012. More than 2 out of 3 web
users know the network and 15% are members. Initially the realm of
experienced users, the network has since benefitted from strong news
events. The latest arrival, Google+, is known by 7% of web users, yet
boasts almost as many registered users as Twitter.
Facebook continued to grow in France, attracting 32.3 million unique
visitors in December 2012, ahead of Microsoft, with 25.6 million.
Facebook remains behind Google and its 40.4 million unique visitors,
but unique visitors spend more time on Facebook, at 4 hours and
57 minutes a month. Facebook has topped the billion users mark
worldwide, of whom 25.6 million active users in France.
Another leading social media, Twitter, has roughly 5.5 million users in
France (out of over 500 million registered users worldwide, 200 million
of whom are active users) and counted 4.4 million unique visitors in
December 2012. Visitor numbers grew 25% in France year on year.
Surprisingly, this growth was mainly driven by over 55s, whose numbers
rose 100% in one year (1.3 million accounts), as well as by 15-24 yearolds (1.2 million, up 62%). France ranks seventh worldwide in Twitter
users, far behind the United States, Brazil, Japan, the UK and Indonesia.
Google+ reported sharp growth in 2012 with some 4.9 million
unique visitors in December 2012, up 60%. Google+ is relying on the
compatibility with the search engine’s other services – Gmail, Chrome,
Maps, especially on mobile handsets – to increase market penetration.
From this standpoint, Google+, which today claims to have 400 million
members, of whom 100 million active members, could have a potential
1.5 billion users, i.e. those from the other services (search, Gmail,
YouTube and so on) liable to switch over to the social networking site.
By staking out its own territory alongside live and non-live TV viewing
while providing a growth source for the physical video market, VoD has
strong growth potential for the coming years. VoD revenues, including
SVoD subscriptions, are expected to reach €300 million in 2013 and top
the €400 million mark by 2015.
The arrival of new distribution media, especially connected TVs, game
consoles and tablets, opens up attractive growth prospects, as does
the development of new offerings like ESTVoD (Electronic Sell-Through
VoD) and definitive VoD (as opposed to rental VoD), which have become
a major focus of the big players in the sector.
TF1 is already looking at a range of solutions to tomorrow’s demand
for VoD.
(1) Source: Médiamétrie/NetRatings November 2012.
(2) The Player rankings record (by parent or brand) the number of unique video viewers who watched a video not only on a group or brand’s website, but also on a third-party website.
Consequently, Player data includes all pages where the player has a presence (in particular, via syndication and Facebook pages).
(3) Source: GFK, Médiamétrie / GFK, CNC and GFK / NPA
(4) Source: Médiamétrie.
79
3
2012 market trends
The TF1 group now has around 11 million fans and 40 fan pages.
Facebook made a number of changes to its algorithm in 2012 that had
a negative impact on the visibility of posts on our fan pages. This impact
has been visible on our traffic from the social media since August 2012,
with a decrease in that traffic.
Through several leading programmes, including The Voice, Secret
Story, MasterChef and Danse avec les Stars, etc., TF1 is pursuing its
innovation strategy and going even further with social TV.
The Voice was the most connected entertainment programme in spring
2012. Two “V Reporters” working behind the scenes of the show and
actively in the social networks brought social media users live news
about the show all season long. The Facebook page (150,000 fans)
and Twitter account (80,000 followers) also presented exclusive content.
The songs featured on the show were available on iTunes, while every
Saturday night a catch-up tweet allowed web users to follow the live
action, synchronised with the best tweets from the community and the
stars of the show on MYTF1.
During Danse avec les Stars, web users were encouraged to make live
comments on the show and share their thoughts on the social media.
Their comments were included in the show, with the most representative
tweets broadcast on TF1 after each dance. In parallel, viewers could get
a behind-the-scenes experience of the show live on the official Twitter
account, the Instagram account and the programme fanpage. They
could interact with the stars, professional dancers, jury members and
hosts, who all have extremely active personal accounts. In “Your opinion
of prime time” (“Votre avis sur le prime”), a special report in the Danse
avec les Stars, la suite programme, a host presented the highlights
of show in the social networks, the most commented dances, and
the funniest tweets. At the end of the season, over 2.7 million tweets
had been posted about the programme and the programme’s Twitter
account ranked number one in the entertainment show category with
some 80,000 followers.
USAGE AND NEW TECHNOLOGIES
DEVELOPMENTS IN TV SET TECHNOLOGY: MOVING TO EVEN
HIGHER-IMPACT TV(1)
Connected TV sets
Connected, or “Smart”, televisions continue to raise a number of issues,
including the real use made of this technology, the raising of market
awareness, competition with Internet operator set-top boxes, and the
need to adapt regulation to new viewing behaviour.
Over 1.6 million connected TV sets were sold in France in 2012, a
significant 8.9% increase on 2011. Sales are set to continue growing,
with connected TVs expected to account for almost all TV sales in five
years.
(1) Source: GFK.
80
The HbbTV trials launched in 2011 have changed dimension, with
almost all channels now having launched services. In July 2012 France
Télévisions released the Salto service on its channels, allowing viewers
to return to the start of their programme at any time. TF1 launched the
first synchronised HbbTV advertisement in France with the advertiser
Amaguiz.
Last year also saw the publication of “DTT 2.0” specifications by
France’s “HD Forum”, setting forth the digital rights management
guidelines to be followed by service producers and TV manufacturers in
France. These guidelines are beginning to be adopted in other European
countries, including Spain, where the government approved this choice
in December.
3D and Ultra HD
Customers continued to lose interest in 3D in 2012. The number of 3D
cinema releases was stable but focused on major productions. However,
3D programmes came to the end of a cycle on television, disappearing
almost in their entirety. Sales of 3D sets rose by 63.7%, but this was a
result of range effect (the 3D function features on large-format TV set
ranges) rather than consumer demand.
3D may be flagging, but Ultra HD – featuring, as the name suggests,
higher-definition images – is starting to make name for itself. HD images
contain 1,920 pixels per line, while UHD images contain around 4,000,
hence the “4K Video” term generally used to describe these new
formats. The first 4K TV models arrived on the market in 2012, targeting
the very high-end segment. But caution remains the keyword for now, as
work on standardisation (new connections, contrast and colour settings)
has only just begun and compatible televisions will not be launched for
several years.
TV ON THE MOVE: COMPANION SCREENS AS TV SCREEN
EXTENSIONS
Smartphones, tablets and app stores
Smartphone ownership rates continue to rise and app stores are selling
more and more products. But the main stories in 2012 were the record
sales of tablets and the explosion in the number of device formats.
After the surprise success of tablets in 2012, consumer electronics
manufacturers impacted by the crisis and the fall in TV and PC sales
stepped up their efforts to develop innovative products. They launched
telephones close to the size of tablets (Samsung Galaxy Note) and
tablets closer to the size of telephones (iPad Mini) and PCs (Microsoft
Surface). Diversity was also the rule in prices and configurations, with
the entry-level segment scoring a big success at Christmas with prices
starting at €100.
2012 market trends
The only group to resist the domination of the Apple and Google Android
ecosystems was Microsoft, which with Windows 8 is seeking to reinvent
itself with a new OS and interface (Metro). Initial sales have been modest
but it is still too early to measure the success of the new system.
3
TF1 continued to strengthen its MYTF1 offer in 2012. MYTF1 was
launched for Android and Windows 8 environments in addition to
the iOS environment covered for several years now. In all, more than
4.5 million MYTF1 downloads were made on smartphones and tablets.
3.1.3 Advertising
The slowdown observed in advertising in second-half 2011 continued
in 2012.
Net plurimedia advertising revenues fell 4.6% in first-half 2012 with the
same trend expected in the second half of the year. Annual net IREPFrance Pub data will be published on March 20, 2013.
Gross investments were down slightly in 2012, by 0.6% year on year(1).
The following data are gross. As such, they should be treated with
caution owing to the continuing strong pressure on prices in 2012, and
hence the differing scope for price negotiation in the various media.
TRENDS IN PLURIMEDIA ADVERTISING SPEND IN
2012(1)(2)
Within the TV category, incumbent channels continued on a positive
trend, with a 1.0% rise in gross spend to €5.4 billion. Freeview DTT
channels pursued their momentum, up 13.7% to €2.7 billion, but at a
slower pace than in 2011 (+28.4%). However, cable and satellite were
down 2.3% to €0.9 billion.
Gross advertising spend rose 3.8% in the first half of the year compared
with first-half 2011 while net spend for the same period was down 4.2%
year on year.
In terms of gross spend, print media remained the second-ranked
market with €7.5 billion despite a 2.7% contraction in revenues. The
market share of print media was down 0.6 points. The freesheet sector
was one of the few to post an improvement, up 6.3%, and now accounts
for 14.9% of print media revenues.
As mentioned above, plurimedia advertising spend in 2012 fell 0.6% on
2011.
In terms of net spend, print media posted the biggest decline, down
8.1% on first-half 2011 (small ads included).
Television (excluding sponsorship) was more than ever the top media,
accounting for 32.7% of gross plurimedia expenditure, up 1.5 points.
Revenues for television rose 4.2% in 2012 to €9.0 billion (largest
increase in gross value).
Gross spend in radio was up 3.7% to €4.3 billion. Market share also
rose, by 0.6 points to 15.6%. While the increase mainly came from
spend on music stations (up 2.4%) and general-interest stations (up
2.2%), local stations were also dynamic (up 16.9%) and now account
for 11.5% of radio spend.
(1) Gross advertising spend – source : Kantar Média (January-December 2012) – Excluding self-promotion – subscription, excluding small ads in the daily press and excluding
TV sponsorship.
(2) Net advertising spend – source: IREP in H1 2012 (annual data available on March 20, 2013).
81
3
2012 market trends
Net spend on national radio was up slightly year on year in first-half
2012, by 0.9%.
It was a difficult year for outdoor advertising, with gross spend down
6.7% to €2.9 billion and market share down 0.7 points to 10.7%.
Gross spend on Internet (display) came to €3.4 billions, down 7.0% on
2011(1). Internet accounted for 12.2% of advertising spend, down 0.9
points.
Net spend on outdoor advertising also contracted in the first half of 2012
(down 4.2% on first-half 2011).
On a net basis, in the first half of 2012, display segment spend was up
5.5% on the first half of 2011.
After a strong year in 2011, cinema maintained gross revenues in 2012
(up 0.3%) and continued to improve in net terms, with a 10.1% increase
in first-half 2012.
TRENDS IN GROSS PLURIMEDIA ADVERTISING SPEND(2)
PRESS
Gross revenues
Change in revenues
Market share
Jan-Dec 2012
Jan-Dec 2012/
Jan-Dec 2011
Jan-Dec 2012
€7,533.8m
-2.7%
27.4%
RADIO
€4,305.3m
+3.7%
15.6%
TELEVISION
€8,998.8m
+4.2%
32.7%
FREEVIEW
€8,143.1m
+5.0%
29.6%
o/w incumbent
€5,409.3m
+1.0%
19.7%
o/w DTT
€2,733.8m
+13.7%
9.9%
€855.7m
-2.3%
3.1%
TV CABSAT
INTERNET
€3,359.1m
-7.0%
12.2%
OUTDOOR ADVERTISING
€2,933.1m
-6.7%
10.7%
€380.8m
+0.3%
1.4%
€27,510.8M
-0.6%
100.0%
CINEMA
TOTAL
TELEVISION IN 2012(2)
With 36.5% of TV advertising spend (down 0.7 points), TF1 was the
leading channel in 2012, with gross revenues of €3.3 billion. M6 ranked
second, with €1.5 billion and a 16.9% share of the market (down 0.2
points).
Advertising spend on freeview DTT channels continued to increase, but
at a slower pace (up 13.7%). Gross spend in 2012 came to €2.7 billion,
accounting for 30.3% of the television total.
Cable and satellite channels were down 2.3% to €856 million on a
gross basis. TF1 Publicité was the number-two advertising airtime sales
agency on cable and satellite with a 23.6% share of the market (up 2.9
points).
Gross/net spend conversion rates are not comparable between DTT
and cable/satellite on the one hand and incumbent television channels
on the other, because gross spend overweights the first two categories
in the television total.
(1) Internet advertising scope: excluding Microsoft Advertising, CCM Benchmark, Senior Planet, La Tribune and Mistral Media, which stopped disclosing their gross Internet revenues in
2012, and excluding TF1 Publicité revenues from December 2011 and 2012.
(2) Gross advertising spend – source: Kantar Média (January-December 2012) – Excluding self-promotion – subscription, excluding small ads in the daily press and excluding TV
sponsorship.
82
2012 market trends
3
GROSS MARKET SHARE OF TV CHANNELS - ALL TV UNIVERSE(1)
TOTAL MEDIA TELEVISION
Incumbent TV
2012
2011
2010
100.0%
100.0%
100.0%
60.2%
62.0%
66.9%
TF1
36.5%
37.2%
40.3%
M6
16.9%
17.1%
18.4%
FRANCE 2
2.9%
3.6%
3.9%
CANAL+
1.9%
2.0%
2.0%
FRANCE 3
1.5%
1.8%
2.0%
FRANCE 5
0.3%
0.4%
0.4%
Freeview DTT
30.3%
27.9%
23.1%
9.5%
10.1%
9.9%
Other channels
GROSS MARKET SHARE OF FREEVIEW DTT CHANNELS - ALL TV UNIVERSE(1)
2012
2011
2010
30.3%
27.9%
23.1%
TMC
4.9%
4.3%
3.9%
W9
4.7%
4.1%
4.1%
NRJ12
4.0%
3.7%
2.6%
i>Télé
3.5%
3.7%
2.7%
BFM TV
3.3%
2.6%
2.0%
NT1
3.2%
2.6%
1.9%
D8
2.9%
2.9%
2.3%
Gulli
2.2%
2.2%
1.9%
D17
1.4%
1.4%
1.4%
FRANCE 4
0.3%
0.3%
0.2%
Freeview DTT
DIGITAL MEDIA IN 2012(2)
According to the SRI group of advertising airtime sales agencies,
the Internet display advertising market (excluding search, affiliation,
directories, e-mails and comparison sites), was worth a net €649 million
in 2012. The market continues to grow (up 5% year on year in 2012), but
at a slower pace (up 11% year on year in 2011). The mobile Internet ad
market (mobile and tablet sites and apps) confirmed its extremely strong
growth, increasing 30% to €48 million net.
There were five major trends in 2012:
p the arrival of Ad exchanges, whose weight in the display market more
than doubled (7% of spend in 2012 compared with 3% in 2011). The
development of Ad exchanges appears to be a deep-seated trend
likely to continue in the coming years(3).
By launching the first premium market place in France, La Place
Média, with Amaury Médias, Le Figaro Médias and Lagardère
Publicité, TF1 Publicité is reasserting its aim to enhance its digital
display inventory through improved audience qualification.
p the particularly dynamic special operations segment (OPS) continued
to develop across all digital platforms. The special operations budgets
of advertisers rose 18% on 2011. Special operations are increasingly
multi-screen and multi-site, and have formats that are more engaging
and technically more elaborate.
By giving digital pride of place in its special operations systems,
TF1 Publicité brings advertisers a broad range of possibilities for
expression and interaction with their customers. TF1 Publicité is
continuously enhancing its offering by taking greater account of
the social networks and by taking full advantage of the special
characteristics of each screen.
(1) Gross advertising spend – source: Kantar Média (January-December 2012) – excluding TV sponsorship.
(2) Source: net data – Barometer Capgemini SRI/UDECAM and IREP.
(3) Source: International Data Conseil (IDC) forecasts.
83
3
2012 market trends
p video (instream) continued to grow sharply in 2012 reaching
€90 million of revenues (up 50% on 2011) with an accelerated rise
in spend in the second half of the year (+60% in H2 2012 compared
with +40% in H1 2012). The strong momentum comes from high
demand, especially in catch-up TV, which is leading publishers to
draw up strategies to develop video content across all screens.
TF1 Publicité has a strong position in this segment, first of all with
MYTF1, which covers practically all TF1 programming between 6 pm
and midnight (excluding cinema) and is available on the web, mobiles,
tablets and connected TVs.
p more and more households are being equipped with connected TVs.
The number of households with ADSL or fibre TV reception was up
22% year on year in October-December 2012, while the number of
households with a connected TV was up 84%(1).
TF1 Publicité is taking advantage of the specificities of this screen,
notably as part of the rollout of special operations. One of the most
decisive special operations in 2012 was the launch of a channel
dedicated to the Yves Rocher brand, available on MYTF1 via set-top
box operators.
p mobile and tablet ownership rates are on the increase. As such,
advertisers are giving these technologies greater pride of place in their
communication plans.
TF1 Publicité has a strong position on this market and stands as a
leader in “second screens” with the introduction of innovative offerings
such as the partnership with Shazam (check-in). And with the launch
of MYTF1 “Connect”, TF1 is raising the bar even higher in terms of
screen synchronisation, both at editorial and advertising level.
OUTLOOK FOR 2013
The economic environment was lacklustre in 2012 and is expected
to be much the same in 2013. GDP could stagnate or even fall (by
0.2% according to Xerfi forecasts), while unemployment is expected to
continue its rise.
That being so, France is not expected to benefit from the global recovery
in advertising spend, with some agencies even forecasting a decline in
spend in the country in 2013.
France would also seem to be something of a unique case internationally
speaking in that it is faced with a three-fold phenomenon:
p an expanding TV offering;
p an explosion in the digital offering, especially in video;
p a fall in advertising demand.
To cope with this market situation and prepare for an economic recovery,
TF1 Publicité is pursuing its strategy to segment its offering from a
cross-cutting standpoint and is conducting a comprehensive review
of multi-channel sales approaches with a view to adapting the value of
each segment.
To bolster the value of our offering in a deflationary market, TF1 Publicité
has brought the market a new demographic target, “Shoppers”, i.e.
working people with children aged under 25. Reflecting changing trends
in society and consumption, the new demographic covers buyers,
opinion leaders and consumers in the food sector and the goods and
services industry. The new target rounds out the range of tools for
measuring advertising effectiveness and returns that TF1 has provided
for a number of years.
In today’s increasingly fragmented landscape, the TF1 channel continues
to hold a singular position thanks to its mass media strength and ability
to generate the greatest amount of impact with related targets.
TF1 Publicité today proposes a comprehensive television offering with its
new advertising responsibilities for HD1 and Numéro 23, which allow it
to cover the entire range of segments and audiences.
3.1.4 Regulation
COMPENSATORY CHANNELS
Article 103 of Act 2007-309 of March 5, 2007 amending the Act of
September 30, 1986 established that the three analogue private channels
(TF1, M6, Canal+) would, on the complete close-down of analogue
television, be awarded an additional channel, called a “compensatory
channel”. However, following a complaint, the European Commission
addressed a formal demand to France on November 24, 2010 in which
it judged the attribution of these compensatory channels incompatible
with the European directives that form the European framework
(1) Source: REM Médiamétrie – User households.
84
applicable to electronic communications networks and services, known
as the “Telecoms Package”, because it would constitute a prohibited
special and exclusive right and would penalise competing operators. In a
substantiated opinion dated September 29, 2011, it called on France to
take all the necessary measures to put an end to this breach.
Taking account of this opinion, the French government decided to
repeal this system and on May 4, 2012 submitted Bill No. 515 on the
abrogation of compensatory DTT channels to the French Senate.
3
3.2 2012 ACTIVITY AND RESULTS
3.2.1 The Group
CONSOLIDATED INCOME STATEMENT IN MANAGEMENT ACCOUNTING FORMAT
(€m)
2012
2011
1,402.8
1,504.1
TF1 channel
Advertising revenue
Advertising costs
(73.5)
(75.2)
1,329.3
1,428.9
Royalties
(56.5)
(60.6)
CNC (National Centre for Cinematography)
(81.6)
(82.0)
(6.0)
(6.4)
(17.8)
(25.7)
(911.3)
(881.4)
(24.2)
(24.1)
NET BROADCASTING REVENUE
Royalties and levies
Tax on broadcast advertising
Broadcasting costs
TDF, satellites, transmission costs
Programming costs (excluding exceptional sporting events)
Exceptional sporting events
GROSS PROFIT
Diversification revenue and other revenue from operations
Other operating expenses
231.9
348.7
1,212.7
1,114.7
(1,102.0)
(1,072.2)
Depreciation, amortisation, provisions and impairment, net
(84.4)
(108.3)
258.1
282.9
Non-current operating income and expenses
(47.7)
-
OPERATING PROFIT
210.4
282.9
0.0
0.5
Cost of net debt
Other financial income and expenses
Income tax expense
Share of profits/(losses) of associates
5.8
5.1
(70.5)
(88.7)
(6.4)
(13.7)
NET PROFIT
139.3
186.1
ATTRIBUTABLE TO THE GROUP
136.0
182.7
3.3
3.4
2012
2011
REVENUE
2,620.6
2,619.7
TF1 channel advertising revenue
1,402.8
1,504.1
Other activities
Attributable to minority interests
CONSOLIDATED DATA
(€m)
1,217.8
1,115.6
258.1
282.9
OPERATING PROFIT
210.4
282.9
NET RESULT
136.0
182.7
85
3
CONSOLIDATED REVENUE
The TF1 group was faced with a very challenging environment in 2012,
due in particular to the impact of the economic situation on advertising
spend.
However, thanks to a capacity for innovation and a good business mix,
the Group proved highly resilient to the tough conditions.
As a result, consolidated revenue held steady year-on-year, reaching
€2,620.6m in 2012 versus €2,619.7m in 2011.
Full-year revenue for 2012 comprised:
p €1,402.8m of advertising revenue from the TF1 channel, down
€101.3m (-6.7%), in an environment made turbulent by the impact of
the economic situation on advertising spend;
p €1,217.8m of revenue from other activities, up €102.2m year-onyear (+9.2%), with most of the Group’s other activities making a
contribution to this increase. Over the full year, the effect of 100% of
Metro France being included in the consolidation from July 28, 2011
largely offset the non-recurrence of the €13.3m generated by the
resale of Rugby World Cup rights booked in the third quarter of 2011.
Advertising revenue for the TF1 group as a whole reached €1,775.5m,
€46.0m (-2.5%) lower than in 2011. The drop in advertising revenue
from the TF1 channel was partly offset by the inclusion of Metro France
advertising, growth in advertising revenue for the DTT channels and
Eurosport International, and greater monetisation of online video.
In the fourth quarter of 2012, the Group generated consolidated revenue
of €767.7m, down €13.2m (-1.7%).
This comprised:
p €423.3m of advertising revenue from the TF1 channel, down €26.4m
(-5.9%) year-on-year. During the quarter, the TF1 channel continued
to suffer as adverse economic conditions deterred advertisers;
p €344.4m of revenue from other activities, a rise of €13.2m (+4.0%),
driven by good performances from TMC, NT1 and TF1 Entreprises in
particular.
The geographical split of full-year consolidated revenue in 2012 was
83% from France, 15% from the rest of the European Union, and 2%
from the rest of the world.
p a beneficial rise in investment in terms of audience, particularly in the
5.30 p.m. – 8.50 p.m. slot.
The nine UEFA Euro 2012 matches screened in June and July 2012 cost
€24.2m. This compares with €24.1m for the 2011 Rugby World Cup,
which TF1 broadcast in the third and fourth quarters of 2011.
Sport programming costs (other than exceptional sporting events) fell by
7.0%, largely due to the non-screening of the UEFA Champions League
in the second half of 2012. The other genres saw programming costs
rise:
p entertainment, gameshows and magazine programmes (+6.4%),
reflecting increased scheduling of unscripted formats;
p drama and series (+5.1%), largely as a result of the screening early
in the year of first-run drama nearing the end of rights protection, to
comply with regulatory requirements;
p news (+3.8%), reflecting strong news flow in 2012, an election year
in France;
p films (+2.3%), as more feature films were screened in 2012.
In the fourth quarter of 2012, programming costs were down €16.8m
year-on-year, mainly due to the non-recurrence in 2012 of the Rugby
World Cup matches shown in October 2011 and to the savings
generated by the non-renewal of the UEFA Champions League
broadcasting contract. Excluding sporting events, programming costs
for the fourth quarter of 2012 were €5.9m lower than in the comparable
period of 2011.
Operating costs were up €19.6m at €1,342.6m, a major factor being
the impact of the acquisition of Metro France in the second half of 2011.
At the start of 2012, the TF1 group launched phase II of its optimisation
plan, with the objective of generating €85m of recurring savings between
2012 and 2014. Pursuant to this Phase II, the Group had already
achieved in 2012 recurring savings of €8m on the programming cost of
TF1, and €7m on overheads, therefore totalling €15m.
Net charges for depreciation, amortisation, provisions and impairment
amounted to €84.4m in 2012, €23.9 million lower than in 2011. In
2011, a high but non-recurring provision for risks and charges had been
booked.
PROGRAMMING COSTS AND OTHER OPERATING
COSTS
The Group made a current operating profit of €258.1m in 2012, €24.8m
less than in 2011.
TF1 channel programming costs were €935.5m in 2012, versus
€905.5m in 2011. This €30.0m rise was due mainly to:
Operating margin was 9.8%, versus 10.8% a year earlier.
p increased scheduling of first-run drama nearing the end of rights
protection, to comply with regulatory requirements;
86
However, there was a further improvement in profitability for diversification
activities, whose operating margin reached 12.5% (versus 9.4% a year
earlier, an improvement of 3.1 points). This performance illustrates again
how in each successive quarter, these activities are proving to be a good
source of fresh earnings growth.
Bear in mind that 2012 full-year current operating profit includes
a €27.1m gain from a successful claim for reimbursement of CNC
(National Centre for Cinematography) taxes, recognised in the first
quarter of 2012.
3
Net profit attributable to minority interests was €3.3m in 2012, compared
with €3.4m in 2011.
In the fourth quarter of 2012, current operating profit was €103.9m,
up €16.5m (+18.9%) on the fourth quarter of 2011. Current operating
margin was 13.5%, versus 11.2% in the fourth quarter of 2011, an
improvement of 2.3 points.
Net profit attributable to the Group therefore came to €136.0m in 2012,
versus €182.7m in 2011. Fourth-quarter net profit amounted to €48.4m
in 2012, versus €57.5m in 2011.
FINANCIAL POSITION
TF1 had shareholders’ equity of €1,801.8m as of December 31, 2012,
out of a balance sheet total of €3,617.8m.
OPERATING PROFIT
Shareholders’ equity attributable to the Group was €1,684.8m as of
December 31, 2012.
The Group made an operating profit of €210.4m in 2012, €72.5m less
than in 2011. Operating margin was 8.0%, versus 10.8% in 2011.
Operating profit for the year includes €47.7m of non-recurring expenses
which consists of the costs incurred on Phase II of the optimisation plan,
and various other adaptation measures introduced during the year.
NET PROFIT
Cost of net debt was not material, since the TF1 group has no debt.
Other financial income and expenses showed net income of €5.8m
in 2012, a year-on-year rise of €0.7m. This reflects the fair value
remeasurement during the second quarter of 2012 of the call option
over TF1’s 33.5% equity interest in the AB Group, which was granted
to Claude Berda in June 2010 and expired on June 10, 2012 without
having been exercised. With effect from June 11, 2012, the AB group
has been accounted for as an associate by the equity method.
Income tax expense for 2012 was €70.5m, versus €88.7m for 2011.
Associates contributed a net loss of €6.4m in 2012. This compares
with a loss of €13.7m a year earlier; most of this was attributable to a
provision of €8.0m taken against the investment in Metro France, which
at that time was 34,3% held by TF1 and accounted for by the equity
method. Metro France has been fully consolidated since July 28, 2011.
On December 31, 2012, the Group had a net cash surplus of €236.3m,
compared with a net debt of €40.6m on December 31, 2011. The cash
surplus at end 2012 includes the cash proceeds in connection with
the acquisition by the Discovery group of a 20% equity interest in the
Eurosport group (based on an enterprise value of €170m) and a 20%
stake in the TV Breizh, Histoire, Ushuaïa TV and Stylía channels (based
on an enterprise value of €14m).
Note that net debt at end-2011 included €58.5m spent by TF1 to acquire
a previously rented building occupied by staff from TF1 SA and LCI.
As of December 31, 2012, the TF1 group had confirmed bilateral credit
facilities of €1,040m with various banks, versus €1,015m at end-2011.
These facilities are renewed regularly as they expire (terms of up to 5
years, depending on the facility), so that the Group has sufficient liquidity
at all times.
On July 24, 2012, the Standard & Poor’s financial ratings agency
reiterated TF1’s rating of BBB+, stable outlook.
The financial position of the TF1 group remains very healthy.
QUARTERLY REVENUE AND OPERATING PROFIT FIGURES
(€m)
Broadcasting France
Q1 2012 Q1 2011 Q2 2012 Q2 2011 Q3 2012 Q3 2011 Q4 2012 Q4 2011
2012
2011
504.9
499.4
540.5
552.8
408.2
442.3
631.2
640.3
2,084.8
2,134.8
Audiovisual Rights
38.1
29.0
26.4
21.1
25.0
23.0
40.3
42.4
129.8
115.5
Broadcasting International
85.6
84.5
105.7
89.3
118.5
95.9
96.2
98.2
406.0
367.9
-
1.5
-
-
-
-
-
-
-
1.5
Other Activities
CONSOLIDATED REVENUE
628.6
614.4
672.6
663.2
551.7
561.2
767.7
780.9
2,620.6
2,619.7
Broadcasting France
39.6
62.4
62.5
118.6
1.8
6.6
93.2
78.9
197.1
266.5
Audiovisual Rights
11.1
0.1
(6.2)
(11.2)
1.8
(14.5)
(3.5)
(14.5)
3.2
(40.1)
5.3
10.0
21.6
17.6
16.7
16.9
14.2
20.7
57.8
65.2
-
(11.0)
-
-
-
-
-
2.3
-
(8.7)
56.0
61.5
77.9
125.0
20.3
9.0
103.9
87.4
258.1
282.9
Other Activities
87
3
INCOME STATEMENT CONTRIBUTIONS BY SEGMENT
Revenue
(€m)
Current operating profit
2012
2011
2012
2011
BROADCASTING FRANCE
2,084.8
2,134.8
197.1
266.5
TF1 SA(1)
1,415.8
1,511.0
106.2
177.8
99.3
100.4
6.8
2.9
320.3
308.8
31.9
38.9
56.9
49.4
10.9
5.7
25.7
26.4
2.4
4.4
101.3
85.0
18.3
9.2
65.5
53.8
20.6
27.6
129.8
115.5
3.2
(40.1)
Téléshopping (Home Shopping)
(2)
Theme Channels – France
TF1 Entreprises
(3)
Production
e-TF1
Other(4)
AUDIOVISUAL RIGHTS
Catalogue(5)
45.7
37.2
2.9
(28.4)
TF1 Vidéo
84.1
78.3
0.3
(11.7)
406.0
367.9
57.8
65.2
-
1.5
-
(8.7)
BROADCASTING INTERNATIONAL
OTHER ACTIVITIES
SPS(6)
TOTAL CONTINUING OPERATIONS
(1)
(2)
(3)
(4)
(5)
(6)
-
1.5
-
(8.7)
2,620.6
2,619.7
258.1
282.9
Includes property companies.
Includes Eurosport France, LCI, TV Breizh, TMC, NT1, HD1, TF6, Série Club, Stylía, Histoire, Ushuaïa TV, TF1 Distribution and TF1 Thématiques (formerly TF1 Digital).
TV and film production entities.
Mainly comprises TF1 Publicité and Metro France.
Mainly comprises TF1 Droits Audiovisuels, TF1 International, and TCM (divested on April 19, 2011).
SPS was divested on May 2, 2011.
BROADCASTING FRANCE
The Broadcasting France Division posted revenue of €2,084.8m in
2012, down €50.0m (-2.3%) year-on-year.
Current operating profit was €69.4m lower than in 2011, at €197.1m.
Current operating margin for the year was 9.5%, versus 12.5% in the
previous year.
TF1 CHANNEL
TF1 broadcasting revenue fell by 6.3% in 2012 to €1,415.8m, €95.2m
lower than the 2011 figure. Full-year advertising revenue was down
6.7% at €1,402.8.
Fourth-quarter advertising revenue was 5.9% lower at €423.3m.
Current operating profit for the year ended December 31, 2012 was
down 40.3% at €106.2m.
TF1(1)
Sales of TV sets in France, after reaching an all-time high of 8.7 million in
2011, slipped back to 6.7 million in 2012.
The average daily viewing time increased again, reaching 3 hours 50
minutes for individuals aged 4 and over (3 minutes more than in 2011).
Among the target audience of “women aged under 50 purchasing
decision-makers”, the average viewing time was 3 hours 58 minutes, up
2 minutes year-on-year.
The terrestrial analogue signal was switched off on November 30, 2011,
which means that virtually 100% of French people with a TV set can now
access a multi-channel offering, so that they can as a minimum receive
the 19 first-wave free-to-air DTT channels. And 58% of them can access
a broader range of channels via satellite, cable, ADSL or pay-to-view
DTT.
Market leadership confirmed
The TF1 channel took an audience share of 22.7% among individuals
aged 4 and over (versus 23.7% in 2011), rising to 25.5% among
“women aged under 50 purchasing decision-makers” (versus 26.7%).
The channel’s 8.5 point positive gap over the following channel in this
key target market is maintained.
Over 2012 as a whole, the TF1 channel attracted 88 of the top 100
audiences across all programmes. It also enjoyed the biggest single
audience on any channel with 13.3 million for Les Enfoirés on March 16,
another all-time high for this show. TF1 retained its unrivalled position,
upholding its reputation as the must-see channel by attracting over
9 million viewers for 26 of its programmes, and over 10 million for 6 of
them.
(1) Source: Médiamétrie – Market leadership in TF1’s prime time slots (8.45 pm - 10.30 pm). Médiamétrie / GK - Multimedia Coverage Survey – October / December – Bases = households
with TV Sets
88
3
TF1 has adapted its positioning to compete with the broader range of
free-to-air TV channels.
series since November 2009) and Josephine Ange Gardien viewed by
up to 7.5 million.
The priority is to be a star performer in the 6 p.m. to 1 a.m. band.
These slots have high audience potential, and hence high monetisation
potential. Over this time band, TF1 has a higher audience share than
over the day as a whole, with 23.7% among individuals aged 4 and
over and 27.9% among the target audience of “women aged under 50
purchasing decision-makers”, representing an extra 1.0 and 2.4 points
respectively versus the day as a whole.
Films: TF1 achieved excellent results for its film screenings. Highlights
included Gran Torino (9.4 million viewers, the best audience for a film
since November 2010) and Les bronzés font du ski (9.0 million viewers).
TF1 is using innovation to refresh its flagship brands and strengthen its
regular programmes. The TF1 editorial policy, built on popular, must-see
programming, has enabled the channel to achieve the no.1 spot across
all its genres. What is more, TF1 achieved the top 10 audience ratings in
entertainment, French drama, films, American series and news.
TF1 channel viewing figures have been on an uptrend since
September 2012. During the last 4 months of the year, the channel drew
an average audience share of 23.2% among individuals aged 4 and
over, rising to 26.0% for “women aged under 50 purchasing decisionmakers”, opening up a 9.0 point positive gap over the following channel
in this key target market.
Prime time market leader
The TF1 channel had an average prime time audience of 6.0 million in
2012.
Within TF1’s prime time slots, the channel was the most-watched
channel on 8 out of 10 evenings.
So despite audience dispersion, TF1 retains its unrivalled position as a
mass media player in France.
No. 1 across all genres (1)
Entertainment: Les Enfoirés was watched by 13.3 million viewers on
March 16.
Another success was the Saturday prime-time show The Voice,
launched in 2012, with an audience peak of 9.3 million and an average
audience share of 47% among “women aged under 50 purchasing
decision-makers” and 34% among individuals aged 4 and over.
American series: Mentalist drew up to 10.1 million viewers, and House
(French title: Dr House) up to 9.1 million.
French drama: 2012 confirmed the dynamism of French drama, with
Profilage attracting up to 7.8 million viewers (the best for a detective
Sport: the final of the UEFA Euro 2012 football tournament was viewed
by 12.9 million people, an all-time high for a Euro tournament match not
involving the French national team.
News: TF1’s daily news bulletins are the most widely-watched in
Europe: the 8 p.m. bulletin attracted up to 9.8 million viewers and the
1 p.m. bulletin up to 8.3 million. An ambitious editorial strategy driven by
news editors and the arrival of new presenters gave fresh impetus both
to the flagship evening news bulletin (Le Journal Télévisé du 20h) and to
the channel’s news coverage generally, and brought larger audiences for
TF1 news programming.
Advertising revenue(2)
Gross plurimedia advertising spend (including the Internet) in 2012 fell
by 0.6% to €27.5bn.
Television (national and regional channels, DTT, cable and satellite)
remains the no. 1 medium in terms of advertising spend, with market
share of 32.7% and gross revenue of €9.0bn in 2012, a year-on-year rise
of 4.2%. Advertising spend on free-to-air DTT is still growing rapidly (up
by 13.7% or €328.6m).
Print media still ranks second behind TV in France, with gross advertising
revenue of €7.5bn, 2.7% lower than in 2011.
Gross revenue for the TF1 channel was up 2.2% year-on-year in 2012.
The channel’s share of gross advertising revenue across the TV market
as a whole was 36.5%.
Some sectors increased their gross advertising spend during 2012:
Cosmetics & Beauty (+4.3%), Retail (+29.2%), Telecoms (+7.5%), Travel
& Tourism (+13.3%), Household Cleaning (+3.7%), Healthcare (+1.6%)
and Apparel (+9.4%). Sectors in decline during 2012 were Food (-1.9%),
Auto (-2.2%), Banking & Insurance (-12.2%), Culture & Leisure (-12.7%)
and Publishing (-8.2%).
Net advertising revenue for the TF1 channel was €1,402.8m in 2012,
6.7% lower than in 2011. This reflects the effect of the climate of
uncertainty on advertisers’ spending decisions. In response, the Group’s
advertising sales business has adopted a strategy designed to bolster
demand.
(1) Source: Médiamétrie / Médiamat
(2) Source: Kantar Media Intelligence.
89
3
SPLIT OF TF1 GROSS ADVERTISING SPEND BY SECTOR, AND 2012 VS 2011 GROWTH
Share of advertising
spend for TF1
-1.9%
+4.3%
-2.2%
3.7%
3.4%
3.0%
To
re
pa
ur
hc
alt
Tr
av
el
&
He
Ap
e
ar
ing
l
3.9%
ism
+9.4%
bli
Pu
ea
old
eh
+13.3%
Ho
us
+1.6%
sh
nin
om
lec
an
ur
Ins
Te
l
tai
-8.2%
5.4%
g
5.7%
&
ing
nk
Ba
+3.7%
s
6.8%
Re
cs
eti
sm
Co
+7.5%
ce
8.0%
&
Be
to
au
od
Fo
9.6%
Au
17.0%
ty
19.3%
-12.2%
Cl
+29.2%
Source: Kantar Media.
UEFA Euro 2012
During the second and third quarters of 2012, TF1 showed the UEFA
Euro 2012 football tournament. This was a major event for the Group,
which achieved excellent performances across all its media platforms
throughout the tournament.
The nine matches screened on the TF1 channel attracted an average
of 8.3 million viewers, representing an audience share of 34% among
individuals aged 4 and over.
Both of the matches involving France shown on TF1 attracted over
10 million viewers: 10.3 million for the match against England, and
11.3 million for the quarter-final against Spain.
The Spain/Italy final achieved the best audience rating for the competition
on any channel, pulling in 12.9 million viewers on July 1, 2012, giving an
audience share of 47.5% among individuals aged 4 and over.
Coverage was rolled our across all of the MYTF1 platforms. MYTF1
offered every match in the tournament plus catch-up of 9 matches,
exclusive video content, and an array of tie-in articles and packages.
The dedicated Euro 2012 website deployed jointly by TF1 and Eurosport
recorded 11.5 million hits and over 6.6 million videos watched.
The site also offered live coverage of the 9 games shown on TF1 using
an innovative player that enabled users to control the live feed, plus the
“Cover it live” feature with added editorial content.
Many users took advantage of cutting-edge social TV features, the
France/Spain match generating hundreds of thousands of live sessions.
Videos and highlights packages also proved very popular.
(1) Source: FEVAD (French e-commerce and distance selling federation).
90
The 360 strategy adopted for the tournament was an unqualified
success.
In financial terms, the impact of the UEFA Euro 2012 tournament on
TF1 channel programming costs over the full year (including rights and
production costs) was €24.2m for the 9 matches broadcast, giving an
average cost per match of €2.7m (versus €3.9m per match for the 2008
tournament).
HOME SHOPPING(1)
After contracting by 0.2% in 2011, the French retail sector as a whole
shrank by 2.9% in 2012. However, the home shopping market grew by
2% over the same period.
During 2012, sales over the Internet increased by 19% in value terms
to €45bn, versus €38bn in 2011, confirming the vitality of e-commerce
in France. Over the year as a whole, 514 million sales transactions were
made on websites, versus 420 million in 2011, a rise of 22.4%.
The TF1 group’s Home Shopping arm generated revenue of €99.3m
in 2012, versus €100.4m in 2011, a slight drop (-1.1%). Good
performances at stores and the Place des Tendances e-commerce
site were offset by lower revenue at Infomercials and at the flagship
Téléshopping brand.
Current operating profit for 2012 was up €3.9m year-on-year at €6.8m.
This performance reflects the commercial success of the business, tight
cost control, and a favourable comparative base (largely due to the
impact on 2012 profits of the divestment of 1000 Listes, which took
place in 2011).
THEME CHANNELS(1)
The terrestrial and satellite analogue signal was switched off on
November 30, 2011, which means that virtually 100% of French people
with a TV set can now access a multi-channel offering.
In 2012, the first-wave free-to-air DTT channels had a combined
audience share of 22.0% among individuals aged 4 and over, versus
21.4% a year earlier and 18.3% two years earlier.
Collectively, the pay-TV channels available in the French market attracted
a combined audience share of 11.2% in 2012, down 0.5 of a point yearon-year.
Since January 1, 2012, the TF1 group’s pay theme channels have been
distributed in France on a non-exclusive basis to pay-TV operators,
which has increased their initialisation rate.
Theme channel revenue for 2012 was €320.3m, up 3.7% year-onyear. Growth was driven by free-to-air channels, especially NT1, which
enjoyed a dynamic year.
Theme channel advertising revenue advanced by €12.7m (+6.9%).
Current operating profit was €31.9m in 2012, a year-on-year fall of
€7.0m, mainly due to LCI (on lower distribution revenue and a busy start
to the year in news), plus increased programming spend at TMC and
NT1 and the launch of HD1 and despite an improvement of Eurosport
France.
TMC
TMC recorded an audience share of 3.6% among individuals aged 4 and
over in 2012 (versus 3.5% in 2011), rising to 4.0% among “women aged
under 50 purchasing decision-makers” (versus 3.9% in 2011).
TMC was France’s leading DTT channel in 2012, cementing its ranking
as the 5th most popular national channel among individuals aged 4 and
over.
The channel had an average prime time audience of 800,000 and was
the most popular channel for films, magazines and entertainment. TMC
had 5 of the top 10 DTT audiences in 2012.
The channel recorded the two highest audience ratings for DTT in the
year, the best being for the film Bodyguard, with over 2 million viewers.
NT1
NT1 saw strong growth in audience share in 2012, both among
individuals aged 4 and over (+11%) and “women aged under 50
purchasing decision-makers” (+13%). NT1’s share of these target
audiences was 2.1% and 2.7% respectively (versus 1.9% and 2.4% in
2011).
The channel had an average prime time audience of 600,000 (100,000
more than in 2011).
3
NT1 also attracted over 1 million viewers on 40 occasions in 2012
(versus 12 in 2011); viewing figures peaked at 1.8 million for the film The
Bourne Supremacy (French title: La mort dans la peau).
These fine performances vindicate the positioning and programming
strategy of NT1, which has not only strengthened its schedules but also
benefited from working with the TF1 group’s programming teams.
Eurosport France
The Eurosport France channel recorded strong growth in its paying
subscriber base to 8.8 million (versus 7.7 million in 2011, a rise of
14.1%). A major factor was the opening up of the channel to distribution
by internet service providers following the end of CanalSat exclusivity.
The Eurosport channel audience was 18% higher than in the previous
wave for the primary target audience (men aged 15 to 49). Eurosport 2
was similarly dynamic, with the strongest audience growth of any sport
channel as viewing figures doubled year-on-year.
Subscription revenue rose year-on year. However, advertising revenue
fell, reflecting the harsh economic environment and tougher competition,
and despite a rise in internet advertising revenue.
Programming costs were higher year-on-year as schedules were
enhanced, in particular with the screening of the London Olympics in the
third quarter of 2012.
TV Breizh
France’s no. 1 general-interest pay-TV cable and satellite mini-channel,
TV Breizh confirmed its market-leading position, with an audience share
of 1.3% among individuals aged 4 and over.
In difficult competitive and economic conditions, TV Breizh achieved
revenue growth and is continuing its efforts to maintain profitability levels.
LCI
In 2012, LCI continued with its editorial stance, focused on analysis and
explanation of news stories.
A feature of the year was the editorial approach to the French presidential
election campaign; this involved an array of special programmes, plus
searching in-depth analysis of news stories and innovative formats such
as Parole de Premiers (a regular show in which former Prime Ministers
commented on campaign issues) and Vu d’Ailleurs (on how the French
political scene is viewed from other countries).
LCI further emphasised its upmarket positioning at the start of the
autumn season with the launch of a new cutting-edge arts programme
(La semaine de l’art) and two new politics shows (A l’épreuve des faits
and Ainsi va l’Amérique).
Discovery Division
The Discovery division recorded revenue growth over 2012 as a whole.
Histoire is pursuing its editorial policy focused on intellectual debate and
the commemoration of major historical events, and continues to build
brand recognition. Ushuaïa TV, the sustainable development channel,
(1) Source: Médiamat’Thématik (wave 23: January 2012-June 2012) Médiamétrie/Médiamat.
91
3
continues to screen regular and one-off programmes on the key issues
in environmental protection, and is stepping up its policy of screening
new documentaries. More than 60% of the channel’s output is in HD
Native. Stylía has rapidly become a force to be reckoned with in lifestyle,
luxury and fashion pay-TV thanks to an ambitious production policy.
Physical sales fell by 11.9%, while related rights rose by 7.5%. The digital
market expanded by 13.0% to €125m, representing 25.6% of sales.
TF6 and Série Club
TF1 Entreprises was also a partner in shows like Disney on Ice, and
for standout artists of 2012 such as Céline Dion and Johnny Hallyday.
The company also developed its role as co-producer of exhibitions and
shows, including the musical 1789, Les amants de la Bastille, which
attracted a total audience of 220,000 in Paris.
Revenue for these channels, owned 50/50 by TF1 and M6, grew
year-on-year. Both channels continued to adjust their cost base, and
improved their margins relative to 2011.
TF1 ENTREPRISES
TF1 Entreprises reported revenue of €56.9m for 2012, 15.2% more than
for 2011.
Current operating profit for the year was €10.9m, a year-on-year rise of
91.2%. Current operating margin was 19.2%, compared with 11.5% in
2011, an improvement of 7.7 points.
Licensing
The Licensing business continues to do well, driven by the ongoing
success of brands such as Barbapapa, Ushuaïa, Hello Kitty and
Masterchef. The collection of Tintin figurines continued to perform well
throughout 2012.
TF1 Entreprises scored many successes across all of its ventures.
PRODUCTION
Games(1)
Revenue for the Production business fell by 2.7% in 2012 to €25.7m.
Current operating profit was €2.4m, €2.0m lower than in 2011.
The market for board and card games contracted by 3.4% in 2012
relative to 2011.
TF1 Films Production(3)
TF1 Games saw its market share shrink slightly, from 7.7% to 7.4%.
The refreshment of the TV games range with the launch of Money Drop
and Les 12 coups de midi helped TF1 Games achieve 11 products in
the top 100 for 2012 sales, including 3 new launches. One big success
was its latest addition to the 1000 Bornes range: 1000 Bornes As du
volant.
(2)
Music
The French music market remained sluggish in 2012, contracting by
4.4%.
(1) Source : The NPD Group.
(2) Source: SNEP (French National Phonographic Publishing Syndicate).
(3) Sources: Écran Total, CNC.
92
In this shrinking market, TF1 musical productions achieved striking
success (Les Stentors, Vincent Niclo and the original soundtrack to the
film Intouchables).
After an exceptional 2011, cinema attendances fell by 5.9% in 2012 to
204.3 million. However, this is still well ahead of the average over the past
10 years, and 2012 was the fourth year running in which total box office
entries topped 200 million (versus a 10-year average of 193.2 million).
French films again enjoyed a healthy market share in 2012 at 40.2%,
after an exceptionally good 2011 (41.6%).
TF1 Films Production recorded a slight decline in revenue, because
fewer co-produced films went on general release than in 2011.
During 2012, 14 films co-produced by TF1 Films Production went on
general release (versus 21 in 2011), of which 8 attracted more than
a million box office entries (versus 13 in 2011).
Film
UN JOUR MON PERE VIENDRA
IL ETAIT UNE FOIS UNE FOIS
Release date
(2011)
Box office
entries
Jan 4, 2012
147,714
Feb 15, 2012
139,145
March 7, 2012
351,694
CLOCLO
March 14, 2012
1,791,770
L’ONCLE CHARLES
March 21, 2012
329,451
April 4, 2012
5,303,302
April 25, 2012
1,056,337
COMME UN CHEF
SUR LA PISTE DU MARSUPILAMI
LES VACANCES DE DUCOBU
LE PRENOM
April 25, 2012
3,340,718
UN BONHEUR N’ARRIVE JAMAIS SEUL
June 27, 2012
1,828,750
BOWLING
July 18, 2012
497,783
LES SEIGNEURS
Sept 26, 2012
2,715,019
STARS 80*
Oct 24, 2012
1,845,040
UN PLAN PARFAIT*
Oct 31, 2012
1,203,215
Dec 5, 2012
279,600
MAIS QUI A RETUE PAMELA ROSE*
*
3
Still being screened as of December 31, 2012.
TF1 Production
TF1 Production reported lower revenue in 2012, due partly to the
discontinuation of some of the programmes produced in 2011 and
partly to seasonal effects. There was only one season of Danse avec les
stars in 2012, as opposed to two in 2011.
However, TF1 Production produced new episodes of the series RIS for
the TF1 core channel during the period, and also continued to produce
shows launched in late 2011 (such as Après le 20h c’est Canteloup).
TF1 Production increased its volume of output for TMC and NT1, and
also handled production of the UEFA Euro 2012 football tournament for
TF1.
e-TF1
Revenue at e-TF1 saw strong growth in 2012, to €101.3m (up 19.2%
on 2011).
Performances were very strong in all areas, including interactivity with
the TF1 channel and MYTF1, which continues to be a success in both
revenue and profitability terms.
Top-line growth and further cost control helped the business double
its current operating profit to €18.3m (versus €9.2m in 2011). Current
operating margin reached 18.1% in 2012, against 10.8% in 2011.
Video performed very well on MYTF1.fr, with 658 millions catch-up
videos viewed in 2012(1), a rise of 20.3%. In terms of time spent watching
videos online, TF1 is the leading French media group, and ranks in the
top 3 in France alongside the big multinationals(2).
The MYTF1 app, launched in January 2011, continues to be a great
success, with more than 4.5 millions downloads to end December
2012(3).
The MYTF1.fr site saw an increase in traffic, with 8.0 millions unique
visitors in December 2012(4), 1.3% more than in December 2011.
OTHER(5)
Revenue amounted to €65.5m in 2012, compared with €53.8m in 2011,
an increase of €11.7m.
Bear in mind that the 2011 figure included €13.3m of revenue from the
resale of Rugby World Cup rights.
In 2012, this item includes revenue from Metro France (100%
consolidated since July 28, 2011), along with the agency commission
generated by TF1 Publicité (including Indés Radio advertising airtime
sales).
Current operating profit came to €20.6m in 2012, compared with
€27.6m in 2011.
This success – in terms of traffic, revenue and profits – provides further
vindication of the TF1 Digital strategy.
(1) Source: Médiamétrie eStat Streaming TV.
(2) Source: Médiamétrie NetRatings – November 2012.
(3) Source: XiTi, eStat Médiamétrie, iTunes Connect, Google Play.
(4) Source: Médiamétrie NNR panel November 2012.
(5) Source: Kantar Média, 2012 versus 2011
93
3
Metro France
The gross print media advertising market shrank by 2.7% relative to
2011. Daily news freesheets recorded further growth, up 6.0% year-onyear. Metro France posted a 16.2% gross revenue growth in 2012. Its
market share reached 27.3%, up 2.3 points on the previous year. By
contrast, 20 Minutes took a 44.3% share (down 0.2 of a point on 2011)
and Direct Matin was at 28.4% (down 2.1 points).
Third-party advertising airtime sales
Radio advertising saw growth of 3.7%. Gross advertising spend on the
radio stations for which TF1 Publicité sells airtime was 13.1% higher
than in 2011, and the company’s gross market share gained 1.0 point to
12.7% on national radio.
AUDIOVISUAL RIGHTS
The Audiovisual Rights Division posted revenue of €129.8m in 2012, a
year-on-year rise of 12.4%.
Current operating profit was €3.2m, up €43.3m versus 2011.
CATALOGUE
The business just broke even, making a current operating profit of
€0.3m, a €12.0m increase on 2011.
BROADCASTING INTERNATIONAL)
EUROSPORT INTERNATIONAL
Eurosport International revenue advanced by 10.4% in 2012 to €406.0m.
Current operating profit was €57.8m, down €7.4m on 2011, due mainly
to the screening of the London Olympics. Current operating margin was
once again robust, at 14.2%.
Revenue growth was boosted both by subscriptions (up 7.3%) and
advertising (up 18.4%). Eurosport International advertising revenue
defied the tough European economic climate, surging to €88.7m on the
back of a busy and attractive schedule of sporting events (especially the
Africa Cup of Nations and Euro 2012 football tournaments, the French
Open of tennis and the London Olympics) and buoyant audience ratings.
For an overview of the French cinema market in 2011, see the comments
on TF1 Films Production.
At end December 2012, the Eurosport channel was being received in
131.8 million homes across Europe (3.0 million more than a year earlier).
The Catalogue business generated 2012 revenue of €45.7m, versus
€37.2m in 2011 (+22.8%). This growth was due to a rise in general
release films.
The Eurosport International paying subscriber base was up 3.6%;
growth was driven mainly by Eastern Europe and the United Kingdom.
Profitability improved sharply in 2012, with current operating profit
reaching €2.9m. This compares with a current operating loss of €28.4m
in 2011, most of which was due to the recognition, in the second and
third quarters of 2011, of a provision relating to the Miracle at St. Anna
litigation.
TF1 VIDÉO(1)
In 2012, the physical and digital video market shrank by 7.8% versus
2011, to €1.3bn. Blu-ray and VoD sales were sharply higher, but failed
to offset a marked fall in DVD revenue. Revenue from Blu-ray was
€224m (+7.2% year-on-year), while VoD sales reached €225m (+13.1%
year-on-year). In 2012, Blu-ray unit sales passed the 10 million mark,
and 43 million pay VoD transactions were recorded. DVD remains the
preferred media among consumers, representing over two-thirds of the
market and a sales value of €892m (14.9% lower than in 2011).
TF1 Vidéo responded to these challenging market conditions by
embarking on a rationalisation process, which led to (i) the implementation
of a job protection plan and (ii) the signature of a distribution agreement
with Paramount Home Media Distribution France on July 13, 2012.
(1) Source: SEVN - Video Barometer - CNC-GFK
(2) Source: Nielsen Net Ratings.
(3) Source: Digital Analytix.
94
Full-year revenues for the Video business in 2012 were up 7.4% at
€84.1m, driven largely by the successful DVD release of the films
Intouchables and Polisse, and by growth in VoD sales.
The Eurosport 2 channel continues to grow, and was being received in
62.5 million homes at end December 2012 (up 9.4% year-on-year).
The Eurosport HD channel is also on a rising trend, having gained
7.6 million new subscribers in twelve months.
The Eurosportnews channel is being received in 2.2 million homes
in Europe, mainly in Portugal and Russia. This channel is also well
embedded outside Europe, especially in Africa and Oceania.
The Asia/Pacific version of the Eurosport channel is continuing to expand
in its catchment area (Asia/Oceania), and had 5.8 million subscribers at
end December 2012 (up 16.8% year-on-year).
Overall, the Eurosport group achieved audience growth of 7.1%, despite
the intensifying level of competition between sports broadcasters.
The Eurosport group’s internet activities are going from strength to
strength, propelling Eurosport to the top ranking among European
sport sites(2). With 14 local versions around the world, the website was
attracting 3.3 million unique visitors at end December(3).
In addition to the website, Eurosport offers a smartphone and tablet app
in 10 languages. This app was downloaded by 10.0 million users (up
85.2% versus 2011).
The Eurosport channels are also broadcast over the Internet, and have
an average monthly following of 105,000 customers (up 47.6% yearon-year).
3
OTHER ACTIVITIES
No activities were included in this segment in 2012. In 2011, this
segment comprised SPS, which generated revenue of €1.5m and a
current operating loss of €8.7m. SPS was divested in May 2011.
3.2.2 Outlook
The TF1 group faces another year of economic uncertainty in 2013.
With the economic situation still deeply troubled, we are working on the
assumption that our full-year consolidated revenue for 2013 will contract
by 3%.
Despite the upheavals of the past five years, we have nonetheless
succeeded in radically transforming the TF1 group:
p in terms of our offering, we are no longer just a mass media player:
we now combine the effectiveness of mass media with the intimacy
of digital media;
p in terms of our business model: the TF1 channel is now at the heart of
a new ecosystem. Its audience, boosted by flagship programmes and
strong brands with massive spin-off potential, has become a source
of fresh revenues.
However, to continue our progress and build for the future, we will
be addressing five key issues in 2013: consolidating our free-to-view
offering, expanding our consumer businesses, enhancing our pay-TV
offering, improving our competitiveness, and continuing to deliver on our
corporate social responsibility agenda.
LOCKING IN A NEW FREE-TO-VIEW MODEL
Our free-to-view TV offering is unrivalled in France, thanks to 4 channels:
TF1, the undisputed leader; the fast-growing channels TMC and NT1;
and HD1, the new creative channel we launched on December 12,
2012. Our free-to-view strategy is to extend the TF1 channel’s reach
across all our activities, building on our status as a multi-channel group.
One of our priorities in 2013 will be to consolidate our overall audience.
We will also focus on developing new programmes on our channels (not
only TF1, but also TMC, NT1 and HD1), enhancing the fit and exploiting
the synergies between our channels, while continuing to comply with all
of our commitments to the relevant authorities.
To provide content to our channels, we will continue with our policy of
investing in innovative formats – on our own, in partnership or via inhouse production – while retaining a rigorous negotiating stance and
making the most of our rights portfolio.
looking for opportunities to sell space on new media, in order to offer
advertisers a more comprehensive service, from mass media to oneto-one media.
EXPAND OUR CONSUMER BUSINESSES
We have forged close relationships with all our publics through all
the outlets available, including social networks. TF1 interacts with
the consumer through home shopping, DVD/VoD production and
distribution, board and card games, and music production.
In this area, we will continue during 2013 to move forward with our
customer-oriented strategy, based on three main levers:
p brand exploitation, including not just the TF1 brand with its unrivalled
promotional and value-creative power, but also our broader portfolio
of strong brands;
p technological opportunities, which will inevitably offer new possibilities
for enhanced viewer/programme interactivity, ever-greater
diversification of access to content, and multi-screen experiences;
p the constantly-evolving customer/viewer relationship, with advertisers
demanding ever sharper targeting. Not only are we making steady
progress in this area, but we also offer an array of media channels
with promising potential.
ENHANCING OUR PAY-TV OFFERING
Our strategy for 2013 will be to develop a competitive offering for
the French market. The partnership between TF1 and Discovery
Communications will enable us to rely on Discovery’s experience in
non-fiction media channels so that we can provide French distributors
with a benchmark offering of theme channels, with our existing channels
complemented by Discovery’s rights portfolio.
We will also seek during 2013 to exploit the many synergies between
Eurosport and Discovery Communications. The two groups will join
forces in distribution (including the formation of a joint venture), in local
advertising, and in business development, consistent with Eurosport’s
strategy.
Finally, in terms of selling airtime on the TF1 and HD1 channels, in 2013
our in-house agency TF1 Publicité will seek to maintain the value of
slots and intensify digital spin-offs. At the same time, the agency will be
95
3
IMPROVING OUR COMPETITIVENESS
CORPORATE SOCIAL RESPONSIBILITY
During 2013, we will press ahead with Phase II of our optimisation plan,
designed to adapt our business model. Focused on reducing operating
costs and introducing greater flexibility, Phase II has already generated
€15m of savings in 2012.
Conscious of our responsibilities as a leading media group, we embed
corporate social responsibility into all of our strategic decisions.
We will now be working to unlock a further €70m of recurring savings
by end 2014, thanks to lower overheads, better productivity and
optimisation of programming costs.
In light of the economic situation, we have decided to accelerate the
implementation of Phase II.
In 2013, TF1 channel programming costs should not exceed €900m.
In 2013, we will once again be at the forefront of CSR initiatives in the
media sector. We will respect diversity in our people and programmes,
and ensure that our programmes are inclusive and non-discriminatory.
We will promote solidarity, social cohesion and sustainable development,
and remain open at all times to dialogue with all our stakeholders.
Thanks to solid fundamentals, a healthy financial position giving us the
means to realise our goals, clear and ambitious strategy, we are now
better placed that ever to consolidate our position as France’s leading
private-sector television group. Our watchwords for the future: anticipate
and deliver.
3.2.3 Post balance sheet events
There are no post balance sheet events to report.
3.2.4 The role of TF1 vis-à-vis its subsidiaries and relations
with the parent company
The positions held by TF1 Executive Directors in the principal
subsidiaries are disclosed on page 6 of the registration document and
Annual Financial Report.
The TF1 group comprises about 40 directly or indirectly owned operating
subsidiaries (see the organisation chart on page 7 of this registration
document), most of them located in France.
The role of TF1 is to define the overall strategic priorities of the Group,
and to provide leadership in areas such as identifying synergies and
standardising procedures.
It also provides corporate support functions to its subsidiaries in fields
such as management, human resources, advisory services and finance.
These services are invoiced by TF1 to the subsidiaries involved; for
details, refer to the disclosures about related-party agreements on
page 289 of the registration document and Annual Financial Report and
to the Statutory Auditors’ report on such agreements (page 188 of the
registration document and annual financial report).
For information about services provided by Bouygues to TF1, refer to
the disclosures about related-party agreements on page 289 of the
registration document and Annual Financial Report and to the Statutory
Auditors’ report on such agreements (page 188 of the registration
document and annual financial report).
From a financial standpoint, TF1’s Treasury Department manages and
pools the cash positions of all the Group’s subsidiaries except for Série
Club, for which treasury management and financing are handled by M6.
3.2.5 The TF1 parent company
RESULTS OF TF1 SA
Net profit for the year was €120.5 million, up 5,2% versus 2011.
In 2012, TF1 SA (the parent company) generated revenue of
€1,356.8 million (down 6.2% versus 2011), comprising €1,339.1 million
of advertising revenue (down 6.7%) and €17.7 million of other revenue
(up 47.5%). Operating profit for the year decreased by €122.1 million to
€75.4 million.
Expenses falling within the scope of Article 39-4 of the French General
Tax Code, which are non-deductible for corporate income tax purposes,
amounted to €265,825 in the year ended December 31, 2011. These
expenses will be submitted to the Annual General Meeting for approval,
in accordance with Article 223 quater of the French General Tax Code.
The parent company reported net financial income of €32.3 million in
2011(up €45,0m versus 2011).
96
APPROPRIATION OF PROFITS
In the resolutions submitted for your approval, we are asking you
to approve the individual financial statements and the consolidated
financial statements for the year ended December 31, 2012 and, and,
having noted the existence of distributable profits of €415,571,374.06,
comprising net profit for the period of €120,521,749.35 and retained
earnings of €295,049,624.71, to appropriate this sum as follows, as
proposed by the Board of Directors:
3
The amount of dividend distributed in respect of the three previous
financial years was as follows:
Net dividend per
share
Year ended
December 31, 2009
€0.43
December 31, 2010
€0.55
December 31, 2011
€0.55
p distribution of a cash dividend of €115,658,170.65 (i.e. a dividend of
€0.55 per €0.20 par value share);
p the balance of €299,913,203.41 to be carried forward as retained
earnings.
ANALYSIS OF TF1 SA TRADE CREDITORS BY DUE
DATE
The ex-date of the dividend on the Euronext Paris market will be April
25, 2013. The date of record (i.e. the day at the end of which the postsettlement positions entitled to the dividend are determined) will be April
29, 2013. The payment date of the dividend will be April 30, 2013.
The table below gives disclosures about trade creditors by due date, as
required by Articles L. 441-6-1 and D. 441-4 of the French Commercial
Code.
We are also asking for your authority to transfer to retained earnings the
amount of dividend accruing to any of its own shares that TF1 may hold,
in accordance with Article L. 225-210 of the French Commercial Code.
In most cases, TF1 SA applies agreed payment terms of 45 days from
the end of the month in which the supplier invoice was issued.
(€m)
Dec. 31, 2012
Dec. 31, 2011
284.0
327.9
Total trade creditors used in the analysis
255.2
289.7
Of which non past due
247.9
269.5
Total trade creditors
(1)
Of which past due
7.3
20.2
Of which past due by less than 30 days
4.6
6.2
Of which past due by between 30 and 90 days
0.4
7.0
Of which past due by more than 90 days
2.3
7.0
(1) The trade creditors total included in the analysis as of December 31, 2012 comprises all trade creditors except for trade bills payable, which amounted to €28.8 million (compared with €38.2 million as
of December 31, 2012).
3.2.6 Principal acquisitions and divestments
NEWLY CONSOLIDATED ENTITIES, CHANGES IN
SCOPE OF CONSOLIDATION AND ACQUISITIONS
OF EQUITY INTERESTS
CHANGE IN PERCENTAGE INTEREST IN THE EUROSPORT
GROUP ENTITIES AND THEME CHANNELS
As a result of the agreement with the Discovery Communications group
(see Note 1, page 109), the percentage control held by the TF1 group in
the Eurosport group entities, and in the Ushuaïa TV, Stylía, Histoire and
TV Breizh pay-TV theme channels, has been 80% since December 21,
2012. The 20% share of the net assets of these entities acquired by
the Discovery Communications group, amounting to €102.6 million, is
presented in consolidated shareholders’ equity attributable to minority
interests. The share of profits for the period from December 22 to
December 31, 2012, has not been allocated to minority interests on
grounds of immateriality.
INCLUSION OF GROUPE AB IN THE SCOPE OF CONSOLIDATION
AS AN ASSOCIATE BY THE EQUITY METHOD
TF1 has held a 33.5% equity interest in Groupe AB since April 2, 2007,
the other principal investor being Claude Berda.
On June 10, 2010, in connection with the acquisition by TF1 of the TMC
and NT1 channels from Groupe AB, TF1 granted Claude Berda a call
option entitling him to buy out TF1’s 33.5% interest in Groupe AB for
its estimated market value of €155 million. In accordance with IAS 27,
TF1 therefore ceased to account for its equity interest in Groupe AB
as an associate by the equity method, instead recognising the equity
interest in the balance sheet as a non-current financial asset at a value
97
3
of €155 million. TF1 elected to recognise subsequent changes in the
fair value of the equity interest in profit or loss, so that they would offset
subsequent changes in the fair value of the option (recognised in financial
income or expense, and in financial liabilities in the balance sheet).
The equity interest and the associated call option were valued on the
basis of the consolidated net assets of Groupe AB as remeasured at fair
value in 2010, plus the profits of Groupe AB recognised since that date
(including depreciation and amortisation charged against remeasured
assets) and a multiple-based approach applicable to Groupe AB.
Because no material change in the fair value of the equity interest
occurred during the life of the option, both the equity interest and the
option were maintained at their initial values, i.e. €155 million and zero
respectively.
As of the expiry date of the option (June 10, 2012), TF1’s equity interest
in Groupe AB was valued at €160.9 million. The fair value of the equity
interest was adjusted accordingly, and a symmetrical financial liability
(of €5.9 million) representing the fair value of the option was also
recognised. Because the option was not exercised, the financial liability
was extinguished, generating a gain (recognised in “Other financial
income”) in the financial statements for the six months ended June 30,
2012.
98
The option having expired, the TF1 group has regained the significant
influence that it used to exercise over Groupe AB. Consequently, this
equity interest is now once again accounted for as an associate by the
equity method, with effect from June 11, 2012.
DIRECT OPTIC PARTICIPATIONS
In accordance with the terms of the agreements signed on March
1, 2011, Téléshopping converted into share capital a €2.5 million
current account balance owed to it by Direct Optic Participations.
This transaction took place on December 28, 2012, and increased
Téléshopping’s equity interest in Direct Optic from 25.4% to 47.8%. This
increased percentage has no impact on the role or power of TF1 vis-àvis Direct Optic Participations.
The investment continues to be accounted for as an associate by the
equity method in the consolidated financial statements.
TF1 SA OTHER COMMITMENTS
None.
Statement of company operations over the last five business years
3
3.3 AVAILABLE INFORMATION IN OTHER PART
OF THE REGISTRATION DOCUMENT
3.3.1 Risks factors and Report on remuneration
With regard to risk factors and compensation of the Executive Director, see chapter 2, pages 55-69 of the registration document.
3.3.2 Human resources and environment update
With regard to human resources and environment update, see chapter 7, pages 227-281 of the registration document.
3.3.3 Information concerning the TF1 company and its capital
With regard to Information concerning the TF1 company and its capital, see chapter 6, pages 201-226 of the registration document.
3.4 STATEMENT OF COMPANY OPERATIONS
OVER THE LAST FIVE BUSINESS YEARS
Nature of indicators (in €)
2008
2009
2010
2011
2012
I - End of year financial position
a) Company capital
42,682,098
42,682,098
42,682,098
42,206,601
42,124,864
213,410,492
213,410,492
213,410,492
211,033,003
210,624,321
1,578,094,919
1,376,578,316
1,484,569,148
1,447,246,247
1,356,804,475
231,461,449
201,671,020
225,847,859
210,521,154
101,904,156
23,176,898
(17,671,273)
33,468,225
45,163,305
17,693,069
3,605,647
256,981
4,645,162
4,620,881
1,761,302
e) Profits after tax, employee participation, liquidations
and provisions
138,921,498
198,396,034
157,208,740
114,484,653
120,521,749
f) Amount of profits distributed
100,302,931
91,766,512
117,375,771
116,013,152
115,658,171(1)
a) Profits after tax and employee participation but before
liquidations and provisions
0.96
1.03
0.88
0.76
0.39
b) Aggregate employment earnings
0.65
0.93
0.74
0.54
0.57
c) Expenditure on benefits
0.47
0.43
0.55
0.55
0.55 (1)
b) Number of shares issued
c) Number of convertible bonds
II - Overall operational results
a) Turnover excluding taxes
b) Profits before tax, employee participation, liquidations
and provisions
c) Tax on profits
d) Employee participation
III - Operational results per share
IV - Employees
a) Number of employees(2)
b) Total payroll costs(3)
c) Total of employee benefit costs
1,536
1,597
1,604
1,633
1,562
121,186,526
118,312,622
120,882,687
124,695,330
147,100,157
54,153,178
69,307,854
64,780,999
61,269,845
67,676,216
(1) Dividend submitted for approval to the General Meeting of April 18, 2013.
(2) Permanent Contracts.
(3) Included expenses to be cashed out.
99
100
4
2012
FINANCIAL STATEMENTS
4.1
CONSOLIDATED FINANCIAL
STATEMENTS
4.3
102
4.1.1 Consolidated balance sheet
102
4.1.2 Consolidated income statement
104
4.1.3 Consolidated statement of changes in equity 106
4.1.4 Consolidated cash flow statement
4.2
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
107
108
AFR
PARENT COMPANY FINANCIAL
STATEMENTS
4.3.1 Parent company income statement
(French GAAP)
162
162
4.3.2 Parent company balance sheet (French GAAP) 164
4.3.3 Parent company cash flow statement
(French GAAP)
4.4
NOTES TO THE PARENT
COMPANY FINANCIAL
STATEMENTS
165
166
The consolidated financial statements of the TF1 group for the year ended December 31, 2012 should be read in conjunction with the
audited consolidated financial statements for the year ended December 31, 2011 and the year ended December 31, 2010, prepared
in accordance with international financial reporting standards, as presented in the 2011 French-language Document de référence filed
with the Autorité des Marchés Financiers (AMF) on March 15, 2012 as number D.12.0163, an English-language version of which (the
2011 registration document) is available on the TF1 corporate website via the link http://www.groupe-tf1.fr/en/finance/financial-resultspublications/financial-reports/2011-6451274-843.html.
The financial statements have been audited, and an unqualified opinion has been issued by the auditors.
101
4
Consolidated financial statements
4.1 CONSOLIDATED FINANCIAL STATEMENTS
4.1.1 Consolidated balance sheet
ASSETS (€m)
Goodwill
Note
Dec. 31, 2012
Dec. 31, 2011
7
874.3
874.3
129.8
142.0
Intangible assets
Audiovisual rights
8.1
55.2
70.8
Other intangible assets
8.2
74.6
71.2
9
216.8
230.8
10
161.1
1.3
12.1
15.8
167.6
28.2.2
10.6
5.8
1,408.4
1,421.8
632.1
648.5
615.2
635.6
16.9
12.9
1,302.0
1,241.8
14.5
0.5
Property, plant and equipment
Investments in associates
Non-current financial assets
Non-current tax assets
Total non-current assets
Inventories
Programmes and broadcasting rights
11
Other inventories
Trade and other debtors
12.4
Current tax assets
Other current financial assets
Cash and cash equivalents
12
2.1
5.9
12.5
258.7
35.9
2,209.4
1,932.6
-
-
3,617.8
3,354.4
236.3
(40.6)
Total current assets
Held-for-sale assets
TOTAL ASSETS
Net surplus cash/(Net debt)
102
15
4
SHAREHOLDERS’ EQUITY AND LIABILITIES (€m)
Share capital
Note
13.1
Share premium and reserves
Net profit for the period attributable to the Group
Shareholders’ equity attributable to the Group
Minority interests
Non-current provisions
Non-current tax liabilities
Dec. 31, 2011
42.1
42.2
1,506.7
1,350.2
136.0
182.7
1,684.8
1,575.1
117.0
12.1
1,801.8
1,587.2
14 & 15
13.6
18.0
16.1
39.3
40.0
Total shareholders’ equity
Non-current debt
Dec. 31, 2012
28.2.2
Total non-current liabilities
9.8
9.9
62.7
67.9
Current debt
15
8.8
58.5
Trade and other creditors
14
1,687.2
1,563.7
16.2
53.5
56.6
2.9
20.2
Current provisions
Current tax liabilities
Other current financial liabilities
Total current liabilities
Liabilities relating to held-for-sale assets
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES
14
0.9
0.3
1,753.3
1,699.3
-
-
3,617.8
3,354.4
103
4
4.1.2 Consolidated income statement
(€m)
Note
Net advertising revenue
TF1 channel
Other media
Diversification revenue excluding advertising
Revenue
17
Other operating revenue
2011
1,775.5
1,821.5
1,402.8
1,504.1
372.7
317.4
845.1
798.2
2,620.6
2,619.7
0.4
0.8
External production costs
18
(772.5)
(702.9)
Other purchases and changes in inventory
19
(442.2)
(432.3)
Staff costs
20
(423.9)
(432.8)
External expenses
21
(488.2)
(469.7)
Taxes other than income taxes
22
(147.0)
(145.2)
(71.8)
(78.4)
Depreciation and amortisation, net
Provisions and impairment, net
(12.6)
(29.9)
Other operating income
23
126.0
87.5
23
(130.7)
(133.9)
258.1
282.9
Current operating profit
Non-current operating income
24
-
-
Non-current operating expenses
24
(47.7)
-
Operating profit
210.4
282.9
Income associated with net debt
25
0.6
1.4
Expenses associated with net debt
25
(0.6)
(0.9)
-
0.5
Cost of net debt
Other financial income
26
7.6
5.9
Other financial expenses
26
(1.8)
(0.8)
Income tax expense
28
(70.5)
(88.7)
Share of profits/(losses) of associates
10
(6.4)
(13.7)
139.3
186.1
-
-
139.3
186.1
136.0
182.7
Net profit from continuing operations
Net profit from discontinued or held-for-sale operations
Net profit
attributable to the Group
attributable to minority interests
104
2012
3.3
3.4
Weighted average number of shares outstanding ('000)
29
210,716
212,436
Basic earnings per share from continuing operations (€)
29
0.65
0.86
Diluted earnings per share from continuing operations (€)
29
0.64
0.86
4
STATEMENT OF RECOGNISED INCOME AND EXPENSE
(€m)
Consolidated net profit for the period
2012
2011
139.3
186.1
(7.2)
2.4
2.5
(0.8)
-
-
(3.8)
2.3
Items not reclassifiable to profit or loss
Actuarial gains/losses on employee benefits
Net tax effect of equity items not reclassifiable to profit or loss
Share of non-reclassifiable income and expense of associates recognised in equity
Items reclassifiable to profit or loss
Remeasurement of hedging instruments
Remeasurement of available-for-sale financial assets
-
-
Change in cumulative translation adjustment of controlled entities
0.1
0.2
Net tax effect of equity items reclassifiable to profit or loss
1.4
(0.8)
-
-
Share of reclassifiable income and expense of associates recognised in equity
Income and expense recognised directly in equity
TOTAL RECOGNISED INCOME AND EXPENSE
attributable to the Group
attributable to minority interests
(7.0)
3.3
132.3
189.4
129.0
186.0
3.3
3.4
105
4
4.1.3 Consolidated statement of changes in equity
(€m)
Balance at december 31, 2010
Capital increase (share options exercised)
Share
Share
Note capital premium
42.7
3.7
-
0.1
(0.4) 1,489.4
-
-
Minority
interests
Total
shareholders’
equity
3.5
1,538.9
8.7
1,547.6
-
0.1
-
0.1
Share-based payment
-
-
-
1.0
-
1.0
-
1.0
Purchase of treasury shares
-
-
(26.5)
-
-
(26.5)
-
(26.5)
(0.5)
(3.8)
26.2
(21.9)
-
-
-
-
-
-
-
(117.2)
-
(117.2)
-
(117.2)
Cancellation of treasury shares
Dividends paid
Other transactions with shareholders
-
-
-
(7.2)
-
(7.2)
-
(7.2)
Total transactions with shareholders
(0.5)
(3.7)
(0.3)
(145.3)
-
(149.8)
-
(149.8)
-
-
-
182.7
-
182.7
3.4
186.1
Income & expense recognised directly
in equity
-
-
-
-
3.3
3.3
-
3.3
Other movements (changes in accounting
policy, changes in scope of consolidation,
other changes)
-
-
-
-
-
-
-
-
42.2
-
(0.7) 1,526.8
6.8
1,575.1
12.1
1,587.2
-
-
-
-
-
-
Capital increase (share options exercised)
-
-
Share-based payment
-
-
-
0.7
-
0.7
-
0.7
Purchase of treasury shares
-
-
(2.3)
-
-
(2.3)
-
(2.3)
(0.1)
-
3.0
(3.0)
-
(0.1)
-
(0.1)
-
-
-
(116.0)
-
(116.0)
(1.0)
(117.0)
Dividends paid
Other transactions with shareholders
-
-
-
93.0
-
93.0
102.6
195.6
Total transactions with shareholders
(0.1)
-
0.7
(25.3)
-
(24.7)
101.6
76.9
-
-
-
136.0
-
136.0
3.3
139.3
Income & expense recognised directly
in equity
-
-
-
-
(7.0)
(7.0)
-
(7.0)
Other movements (changes in accounting
policy, changes in scope of consolidation,
other changes)
-
-
-
5.4
-
5.4
-
5.4
42.1
-
- 1,642.9
(0.2)
1,684.8
117.0
1,801.8
See Note 13, “Consolidated shareholders’ equity”, for a breakdown of these changes.
106
Shareholders’
Income and
equity
expense
recognised attributable
to the
directly in
Treasury
Group
equity
shares Reserves
4
4.1.4 Consolidated cash flow statement
(€m)
Note
Consolidated net profit (including minority interests)
Depreciation, amortisation, provisions and impairment (excluding current assets)
2012
2011
139.3
186.1
75.3
79.7
Intangible assets and goodwill
44.7
48.2
30.4
29.7
Financial assets
(0.2)
0.2
0.4
1.6
Other non-cash income and expenses
Non-current provisions
(9.2)
(14.6)
Effect of fair value remeasurement
(5.2)
(2.5)
0.7
1.0
Share-based payment
Net (gain)/loss on asset disposals
0.4
(3.5)
Share of (profits)/losses and dividends of associates
6.4
13.7
Dividend income from non-consolidated companies
Sub-total
Cost of net debt
Income tax expense (including deferred taxes)
Operating cash flow
Income taxes (paid)/reimbursed
Change in operating working capital needs
(1.2)
(1.7)
206.5
258.2
-
(0.5)
70.5
88.7
277.0
346.4
(102.1)
(73.2)
87.6
(82.1)
Net cash generated by/(used in) operating activities
262.5
191.1
Cash outflows on acquisitions of property, plant and equipment and intangible assets
(51,4)
(100.9)
1.1
1.9
(3.4)
(5.4)
0.1
-
Cash inflows from disposals of property, plant and equipment and intangible assets
Cash outflows on acquisitions of financial assets
Cash inflows from disposals of financial assets
Effect of changes in scope of consolidation
(6.4)
8.8
(6.4)
(4.8)
Proceeds from disposals of investments in consolidated activities
-
16.8
Net liabilities related to consolidated activities
-
-
-
(3.2)
1.2
1.7
Purchase price of investments in consolidated activities
Other cash effects of changes in scope of consolidation
Dividends received
Change in loans and advances receivable
Net cash generated by/(used in) investing activities
Cash received on exercise of share options
Purchases and sales of treasury shares
Other transactions between shareholders
30.3
Dividends paid during the year
Cash inflows from new debt contracted
Repayment of debt (including finance leases)
Net interest paid (including finance leases)
0.2
(0.8)
(58.6)
(94.7)
-
0.1
(2.3)
(26.5)
192.3
-
(117.0)
(117.2)
0.4
0.2
(4.7)
(8.7)
-
0.5
68.7
(151.6)
CHANGE IN CASH POSITION OF CONTINUING OPERATIONS
272.6
(55.2)
Cash position of continuing operations at start of period
(18.2)
37.0
Net cash generated by/(used in) financing activities
Change in cash position of continuing operations during the period
Cash position of continuing operations at end of period
30.1
272.6
(55.2)
254.4
(18.2)
107
4
Notes to the consolidated financial statements
4.2 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
108
Note 1
Significant events of 2012
109
Note 2
Accounting policies
109
Note 3
Significant changes in scope of consolidation
120
Note 4
Operations held for sale
121
Note 5
Interests in jointly controlled entities
121
Note 6
Segment information
122
Note 7
Goodwill
123
Note 8
Intangible assets
125
Note 9
126
Note 10 Investments in associates
127
Note 11 Programmes and broadcasting rights
128
Note 12 Financial assets
129
Note 13 Consolidated shareholders’ equity
132
Note 14 Financial liabilities
133
Note 15 Net debt
134
Note 16 Provisions
135
Note 17 Operating revenues
138
Note 18 External production costs
138
Note 19 Other purchases and changes in inventory
138
Note 20 Staff costs
138
Note 21 External expenses
139
Note 22 Taxes other than income taxes
140
Note 23 Other operating income and expenses
140
Note 24 Non-current operating income and expenses
140
Note 25 Cost of net debt
141
Note 26 Other financial income and expenses
141
Note 27 Net income and expense on financial assets and financial liabilities
142
Note 28 Income taxes
142
Note 29 Earnings per share
144
Note 30 Notes to the consolidated cash flow statement
145
Note 31 Risk management
147
Note 32 Share options
154
Note 33 Off balance sheet commitments
155
Note 34 Related-party information
157
Note 35 Auditors’ fees
158
Note 36 Dependence on licences
158
Note 37 Post balance sheet events
158
Note 38 Detailed list of companies included in the consolidation
159
4
Note 1 Significant events of 2012
1.1 STRATEGIC PARTNERSHIP WITH THE DISCOVERY
COMMUNICATIONS GROUP
Under the terms of the partnership agreement signed on December 21,
2012 relating to the activities of Eurosport, the pay-TV channels and
production activities, the TF1 group sold a 20% equity interest in the
Eurosport group and in the TV Breizh, Ushuaïa TV, Stylía and Histoire
pay-TV theme channels to the Discovery Communications group.
In accordance with the revised IAS 27, the gains arising on these
transactions (amounting to €93 million, net of tax) were treated as arising
from transactions between shareholders and recognised in consolidated
shareholders’ equity attributable to the Group, with no impact on profit
or loss for the period.
1.2 PHASE II OF THE OPTIMISATION PLAN
The sale of the 20% interest in the Eurosport group was completed on
the basis of an enterprise value of €850 million, plus the net cash held by
Eurosport on December 31, 2012. This transaction generated a gain of
€84.3 million net of taxes.
Phase II of the optimisation plan is described in the “Outlook” section
of the Management Review. The costs incurred have been reported in
“Non-current operating expenses”, as described in Note 24 below.
The terms of the agreement give the Discovery Communications group
the option to increase its equity interest in the Eurosport group to 51% in
two years’ time, which if exercised would give the TF1 group the option
to sell the remaining 49% to the Discovery Communications group (see
Note 33, “Off balance sheet commitments”).
1.3 GROUPE AB
The sale of the 20% interest in the theme channels was completed on the
basis of an enterprise value of €70 million, plus the net cash held by the
theme channels. This transaction generated a gain of €8.7 million net of
taxes. The terms of the agreement give the Discovery Communications
group the option to increase its equity interest in the theme channels to
49% in two years’ time (see Note 33, “Off balance sheet commitments”).
The call option over TF1’s 33.5% equity interest in Groupe AB, held by
Claude Berda since June 10, 2010, expired on June 11, 2012 without
having been exercised. Because the call option no longer exists, the
significant influence that TF1 used to exercise over Groupe AB has been
re-established, as a result of which (i) the equity interest in Groupe AB
has been accounted for as an associate by the equity method since June
11, 2012, and (ii) the fair value remeasurement of the equity interest,
amounting to €5.9 million, has been recognised in “Other financial
income”. See Note 3, “Significant changes in scope of consolidation”,
and Note 10, “Investments in associates”.
Note 2 Accounting policies
2.1 DECLARATION OF COMPLIANCE AND BASIS OF
PREPARATION
2.2 NEW AND AMENDED ACCOUNTING STANDARDS
AND INTERPRETATIONS
The consolidated financial statements of the TF1 group for the year
ended December 31, 2012 have been prepared in accordance with
International Financial Reporting Standards (IFRS) as endorsed by the
European Union, as required under EC Regulation 1606/2002 of July
19, 2002.
2.2.1 New standards, amendments and interpretations
endorsed by the European Union and mandatorily
applicable or eligible for early adoption in periods
beginning on or after January 1, 2012
They include the financial statements of TF1 SA and its subsidiaries and
jointly controlled entities, and the TF1 group’s interests in associated
undertakings. They also reflect the recommendations issued by the CNC
(the French national accounting standard-setter) on the presentation of
financial statements (recommendation no. 2009-R-03 of July 2, 2009).
In preparing its consolidated financial statements for the year ended
December 31, 2012, the TF1 group applied the same standards,
interpretations and accounting policies as those used in the preparation
of its consolidated financial statements for the year ended December
31, 2011, plus any new standards, amendments and interpretations
applicable from January 1, 2012.
The consolidated financial statements are presented in millions of euros.
They were adopted by the Board of Directors on February 19, 2013, and
will be submitted for approval by the shareholders at the forthcoming
Ordinary General Meeting to be held on April 18, 2013.
The principal new standards, amendments and interpretations endorsed
by the European Union or eligible for early adoption are:
p amendment to IFRS 7, “Disclosures – Transfers of Financial Assets”:
mandatorily applicable from January 1, 2012, no impact on the
financial statements;
p amendment to IAS 1, “Presentation of items of Other Comprehensive
Income (OCI)”: early adopted with effect from January 1, 2011,
impact on the presentation of the statement of recognised income
and expense;
109
4
p amendment to IAS 19, “Employee Benefits”: mandatorily applicable
from January 1, 2013, with early adoption permitted with effect from
January 1, 2012. The TF1 group has early adopted this amendment
in the consolidated financial statements for the year ended
December 31, 2012; the impact is not material, as the TF1 group
already recognised actuarial gains and losses on defined-benefit
employee benefit plans directly in equity.
The TF1 group has decided not to early adopt any of the other
standards issued by the IASB and endorsed by the European Union that
companies may elect to early adopt with effect from January 1, 2012.
2.2.2 New standards, amendments and interpretations endorsed by the European Union and applicable subsequent
to December 31, 2012
Standard/Interpretation
IASB effective date
Expected impact on TF1
Revised IAS 27: Separate Financial Statements
January 1, 2014
No impact on the financial statements
Revised IAS 28: Investments in Associates and Joint Ventures
January 1, 2014
Under review
IFRS 10: Consolidated Financial Statements
January 1, 2014
Under review
IFRS 11: Joint Arrangements
January 1, 2014
Under review
IFRS 12: Disclosure of Interests in Other Entities
January 1, 2014
Under review
IFRS 13: Fair Value Measurement
January 1, 2013
Under review
July 1, 2013
January 1, 2013
Amendment to IFRS 1: Severe Hyperinflation and Removal of Fixed
Dates for First-Time Adopters
Amendment to IAS 12: Deferred Tax – Recovery of Underlying Assets
2.2.3 New standards, amendments and interpretations issued by the IASB but not yet endorsed by the European Union
Standard/Interpretation
IASB effective date
Expected impact on TF1
IFRS 9: Financial Instruments (classification and measurement of financial assets)
January 1, 2015
Not quantifiable at present
(endorsement process suspended
by the European Union)
Amendment to IAS 32: Offsetting Financial Assets and Financial Liabilities
January 1, 2014
Under review
2.3 CHANGES IN ACCOUNTING POLICY
p Recognition and measurement of audiovisual rights (Note 2.8.1);
TF1 did not make any changes in accounting policy during 2012 other
than those required to comply with new or amended IFRS requirements
applicable on or after January 1, 2012 (as shown in Note 2.2.1), which
have no material effect on the financial statements.
p Recognition and measurement of programmes, broadcasting rights
and sports transmission rights (Note 2-12);
p Classification of financial instruments (Notes 2.11 and 2.17);
p Revenue recognition (Note 2.20).
2.4 SELECTION OF ACCOUNTING TREATMENTS,
EXERCISE OF JUDGMENT AND USE OF
ESTIMATES
Preparation of the consolidated financial statements requires TF1
management to exercise judgement in the selection of accounting
treatments and to use estimates for the measurement of assets,
liabilities, income and expenses, which may have a material impact on
the amounts reported in the financial statements.
2.4.1 Accounting policies
The principal accounting treatments involving the exercise of judgment
are listed below, along with a reference to the Note that describes the
main analytical methods used in applying each treatment:
p Goodwill and impairment testing (Notes 2.8 and 2.11);
110
2.4.2 Use of estimates
Preparation of the consolidated financial statements requires the TF1
group to make various estimates and use various assumptions regarded
as realistic and reasonable. Subsequent events or circumstances may
result in changes to these estimates or assumptions, which could affect
the value of the Group’s assets, liabilities, equity or net profit.
The principal accounting policies requiring the use of estimates are:
p impairment of goodwill (Note 7): the carrying amount of goodwill in
the TF1 consolidated financial statements is reviewed annually using
the method described in Note 2-10-1. These impairment tests are
sensitive to medium-term financial forecasts and to the discount rates
used to estimate the value in use of cash-generating units (CGUs);
p impairment of audiovisual rights (Note 8.1): impairment testing of
audiovisual rights is based on an analysis of projected future revenues;
p impairment of programmes and broadcasting rights (Note 11):
impairment testing of programmes and broadcasting rights is based
on the probability of transmission, assessed mainly on the basis of
future programming schedules;
p measurement of provisions for retirement benefit obligations (Note 16.1-2): these provisions are calculated by the TF1 group itself
using the projected unit credit method, as described in Note 2-191. This calculation is sensitive to assumptions regarding the discount
rate, the salary inflation rate and the staff turnover rate;
p provisions (Note 16): provisions are established to cover probable
outflows of resources to third parties with no corresponding inflow
of resources for the Group. They include provisions for all kinds of
litigation and claims, the amount of which is estimated based on
assumptions regarding the most likely outcomes. In determining
these assumptions, TF1 management may rely on the assessments
of external advisors;
p fair value of financial instruments (Notes 12 and 14): the fair value of
financial instruments is determined by reference to market prices. In
the case of derivatives, market prices are determined and supplied
to the TF1 group by its bankers. Where no quoted market price is
available, fair value is estimated using other valuation methods such
as the discounted cash flow method.
2.5 CONSOLIDATION METHODS
2.5.1 Subsidiaries
Subsidiaries are companies over which TF1 exercises control. Control is
presumed to exist where the parent company has the power directly or
indirectly to govern the financial and operating policies of an enterprise
so as to obtain benefits from its activities. Subsidiaries are included in
the consolidation from the date on which control is effectively transferred
to the Group. Divested subsidiaries are excluded from the consolidation
from the date on which the Group ceases to have control.
TF1 accounts for investees over which it exercises exclusive control
using the full consolidation method. Under this method, all assets,
liabilities, equity, income and expenses of each subsidiary are combined
on a line-by-line basis in the consolidated financial statements.
Minority interests in equity and in net profit are identified separately
under “Minority interests” in the consolidated balance sheet and the
consolidated income statement.
2.5.2 Jointly controlled entities
A jointly controlled entity is one in which the power to govern the
financial and operating policies of the entity is contractually shared by
TF1 with one or more other parties, none of which exercises control.
TF1 accounts for interests in such entities using the proportionate
consolidation method. Under this method, TF1 includes its own share
of the subsidiary’s assets, liabilities, equity, income and expenses in the
relevant lines of its own consolidated financial statements.
4
2.5.3 Associates
An associate is an enterprise in which TF1 exercises significant influence,
which means that TF1 has the power to participate in the financial and
operating policy decisions of the investee without exercising control.
Significant influence is presumed to exist if the parent company holds,
directly or indirectly, 20% or more of the voting power of the investee.
This presumption is reviewed in light of the way in which the investee is
effectively governed and managed.
TF1 accounts for investments in associates using the equity method.
Under this method, the investment in the associate is initially recorded
in the balance sheet at acquisition cost. The carrying amount is then
increased or decreased by the Group’s share of the associate’s profits or
losses and of other changes in the equity of the associate subsequent
to the acquisition date.
2.6 FOREIGN CURRENCY TRANSLATION
2.6.1 Translation of the financial statements of foreign
entities
The financial statements of foreign operations are translated into euros,
the reporting currency of the TF1 group. All assets and liabilities of
foreign entities are translated at the closing exchange rate; income and
expenses are translated at the average rate for the period. Translation
differences arising from this treatment, and from retranslating the
opening equity of foreign entities at the closing exchange rate, are taken
to equity under “Share premium and reserves”. On disposal of a foreign
entity, these differences are taken to profit or loss as part of the gain or
loss on disposal.
p Specific treatment on transition to IFRS
The TF1 group applied the option allowed under IFRS 1, under which
existing cumulative translation differences arising from the translation of
the financial statements of foreign subsidiaries into euros were deemed
to be zero. The balance as of January 1, 2004 under French generally
accepted accounting principles (“French GAAP”) was reclassified to
reserves, with no impact on shareholders’ equity attributable to the
Group. Consequently, the gain or loss on a subsequent disposal of any
consolidated entity or associate will exclude translation differences that
arose before the date of transition to IFRS.
2.6.2 Translation of transactions denominated in foreign
currencies
Transactions denominated in foreign currencies carried out by
subsidiaries and jointly controlled entities are initially translated into the
functional currency of the subsidiary or entity using the exchange rate
at the transaction date. At the balance sheet date, monetary assets
and liabilities denominated in foreign currencies are translated at the
closing exchange rate. Any resulting translation differences are taken
to profit or loss. Non-monetary assets and liabilities denominated in a
foreign currency are recognised at historical cost and translated using
the exchange rate at the transaction date.
111
4
2.7 BUSINESS COMBINATIONS AND GOODWILL
p Specific treatment on transition to IFRS
Business combinations are accounted for using the acquisition method
in accordance with IFRS 3. A revised version of IFRS 3 became effective
on January 1, 2010 without retrospective effect. The main effects of
the revision are a tightening of the “control” criterion in accounting for a
business combination, and broader use of fair value accounting.
In accordance with the option allowed under IFRS 1, the TF1 group
elected not to remeasure goodwill arising on business combinations
effected prior to January 1, 2004.
The treatment applied by TF1 to business combinations with effect from
January 1, 2010 is as follows:
The cost of a business combination is the fair value, at the date of
exchange, of the assets transferred, the liabilities incurred or assumed,
and the equity instruments issued by the Group, in exchange for control
over the acquiree.
The identifiable assets, liabilities and contingent liabilities of the acquiree
that satisfy the IFRS recognition criteria are recognised at their fair value
at the acquisition date, except for non-current assets held for sale which
are recognised at fair value less costs to sell in accordance with IFRS 5.
Any excess of the cost of a business combination over the acquirer’s
interest in the net fair value of the identifiable assets, liabilities and
contingent liabilities at the acquisition date is recognised as goodwill.
Minority interests may also be measured at fair value (the “full goodwill”
method), giving rise to additional goodwill; this option may be elected
separately for each business combination.
Subsequent changes in percentage interest with no loss of control over
the acquiree are accounted for as transactions between shareholders,
with the difference between the purchase price (or sale price) and the
carrying amount of the interest acquired (or sold) recognised in equity.
In the case of step acquisitions, equity interests held prior to
acquisition of control are remeasured at fair value, with the effect of the
remeasurement recognised in profit or loss. The same applies to equity
interests retained after loss of control.
Costs directly incurred to effect a business combination are recognised
in profit or loss.
If the initial accounting for a business combination can be determined
only provisionally by the end of the period in which the combination
is effected, the TF1 group recognises any adjustments to these
provisional values within twelve months following the acquisition date.
If the adjustment between provisional and final fair value accounting
materially affects the presentation of the financial statements, the
comparative information for the period preceding the final accounting
for the combination is restated as though the final accounting had been
completed at the acquisition date.
If the share of the fair value of the identifiable assets and liabilities
acquired exceeds the cost of the combination, the excess is recognised
immediately in the income statement as negative goodwill.
Subsequent to initial recognition, goodwill is measured at cost less
any impairment losses, determined using the method described in
Note 2-10. Any impairment losses are charged as an operating item in
the income statement, and may not be subsequently reversed.
112
p Accounting treatment of business combinations predating January 1,
2010:
Because the revised IFRS 3 (Business Combinations) was not
retrospectively applied, goodwill arising on business combinations
predating January 1, 2010 has been maintained at its December 31,
2009 carrying amount. Goodwill on these transactions was determined
using the accounting treatments applicable as of the date of the
transactions. The main divergences in accounting treatment are as
follows:
− in a step acquisition, the previously-held equity interest was not
remeasured,
− costs directly incurred to effect a business combination were
included in the cost of the combination, and hence were included
in the amount of goodwill recognised prior to January 1, 2010,
− the election to measure minority interests at fair value was not
available, which meant that the full goodwill method was not
permitted,
− changes in percentage interest with no change in control over
the acquiree generated additional goodwill in the case of an
acquisition, and a gain or loss in the event of a disposal.
2.8 INTANGIBLE ASSETS
Separately acquired intangible assets are initially recognised at
acquisition cost or (if acquired in a business combination) at fair value as
of the acquisition date.
Subsequent to the acquisition date, intangible assets are measured at
initial recognition cost less accumulated amortisation and impairment
losses.
Intangible assets with finite useful lives are amortised over their expected
useful lives.
Intangible assets with indefinite useful lives are not amortised.
2.8.1 Audiovisual rights
This item primarily includes shares in films and audiovisual programmes
produced or co-produced by TF1 Films Production, TF1 Vidéo and TF1
Production; distribution and trading rights owned by TF1 DA and TF1
Entreprises; and music rights owned by Une Musique.
Audiovisual rights are recognised as an asset in the balance sheet at
historical cost under “Audiovisual rights” on the following dates:
p date of end of shooting or censor’s certificate for film co-productions;
p date of signature of contract for acquired audiovisual distribution and/
or trading rights and music rights.
4
Amortisation periods for these categories of audiovisual rights are as
follows:
2.9.2 Property, plant and equipment acquired under finance
leases
p shares in film co-productions: amortised in line with revenues over 8
years;
Property, plant and equipment held under leases which transfer
substantially all the risks and rewards of ownership of the asset to the
TF1 group is recognised as an asset in the balance sheet at the inception
date of the lease, at the lower of the fair value of the leased asset or
the present value of the minimum lease payments. Lease payments
are apportioned between the finance charge and the reduction of the
outstanding liability; the finance charge is recognised in the income
statement under “Expenses associated with net debt”, a component of
“Cost of net debt”.
p audiovisual distribution rights: amortised in line with revenues, with a
minimum of 3 years straight-line;
p audiovisual trading rights: straight-line basis over 5 years;
p music rights: amortised over 2 years, 75% in the first year and the
remaining 25% in the second year;
p films co-produced by TF1 Films Production are amortised in line with
revenues over a limited time-frame, taking account of the timing of
revenue sources; this policy is consistent with industry practice.
Assets held under finance leases are depreciated over the same periods
as assets of the same type owned outright.
A provision for impairment is recorded individually if estimated future
revenues do not cover the net carrying amount.
2.10 IMPAIRMENT OF NON-CURRENT ASSETS
2.8.2 Other intangible assets
Other acquired intangible assets are carried at acquisition cost less
accumulated amortisation and impairment losses. These mainly
comprise operating licences (other than broadcasting licences and
audiovisual rights), trademarks and similar rights, and software.
These assets are amortised on a straight-line basis over their expected
useful lives, except for certain commercial trademarks owned by
the TF1 group and regarded as having an indefinite useful life, which
are not amortised. These trademarks are tested for impairment (see
Note 2-10-1).
2.9 PROPERTY, PLANT AND EQUIPMENT
2.9.1 Property, plant and equipment owned outright
Property, plant and equipment is carried at acquisition cost net of
accumulated depreciation and impairment losses.
Depreciation is charged on a straight-line basis over the expected useful
life of the asset, taking account of any residual value of the asset:
p buildings: 25 to 50 years;
p technical installations: 3 to 7 years;
p other property, plant and equipment: 2 to 10 years;
p land is not depreciated.
Where an asset is made up of components with different useful lives,
these components are recorded as separate items within property, plant
and equipment.
Gains or losses on disposals of property, plant and equipment represent
the difference between the sale proceeds and the net carrying amount of
the asset, and are included in “Other operating income and expenses”.
At each balance sheet date, TF1 assesses whether there are internal
or external events or circumstances which indicate that a non-current
asset may have been impaired. If there is such an indication, or if the
asset is required to be tested for impairment annually (goodwill, and
intangible assets with indefinite useful lives), the recoverable amount of
the asset is estimated.
2.10.1 Goodwill and indefinite-lived intangible assets
The recoverable amount of an asset is the higher of value in use or fair
value less costs to sell. If fair value less costs to sell cannot be reliably
measured, the recoverable amount of an asset is its value in use.
The value in use of assets to which independent cash flows can be
directly allocated is determined individually. All other assets are grouped
within cash-generating units (CGUs) to determine their value in use. A
CGU is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other assets
or groups of assets.
The value in use of an asset or a CGU is measured using the discounted
cash flow (DCF) method, based on 3-year cash flow projections approved
by TF1 management and the Board of Directors plus a standard annual
cash flow figure for the time horizon beyond the 3-year business plan.
The cash flows used are determined on an after-tax basis.
These cash flow projections are discounted using an after-tax discount
rate, determined on the basis of the weighted average cost of capital
(calculated on the basis of market parameters, such as beta and
capitalisation) of a sample of companies representative of the business
sector to which the asset being tested belongs.
The fair value less costs to sell of an asset or CGU is measured, where
possible, by reference to the price in a binding sale agreement in an
arm’s length transaction.
113
4
An impairment loss is recognised where the recoverable amount of an
asset or CGU is less than its carrying amount. Impairment losses on
finite-lived and indefinite-lived items of property, plant and equipment
and intangible assets may be reversed subsequently if the recoverable
amount of the asset becomes greater than its carrying amount again.
The only impairment losses that may not be reversed are those relating
to goodwill.
2.10.2 Investments in associates
Because goodwill included in the carrying amount of investments
in associates is not presented separately, this goodwill is not tested
individually for impairment, in accordance with IAS 36. The total carrying
amount is tested for impairment by comparing its recoverable amount to
its carrying amount if there is evidence that the investment is impaired.
2.10.3 Other non-current assets
The methods used to test other non-current assets (in particular,
audiovisual rights) for impairment are described in the relevant sections.
2.11 FINANCIAL ASSETS
Financial assets may be classified in one of four categories: availablefor-sale financial assets, loans and receivables measured at amortised
cost, held-to-maturity investments, and assets at fair value through profit
or loss. In accordance with IAS 1, financial assets are classified as either
current assets or non-current assets.
Loans and receivables are assessed individually for objective evidence
of impairment. An asset is regarded as impaired if the carrying amount
is greater than the estimated recoverable amount as determined in
impairment tests.
Impairment losses are recognised in profit or loss, but may be reversed if
the recoverable amount increases in subsequent periods.
2.11.3 Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with
fixed or determinable payments and fixed maturity that an entity has the
positive intention and ability to hold until maturity. They are measured
and carried at amortised cost calculated using the effective interest
method.
Held-to-maturity investments are assessed individually for objective
evidence of impairment, and regarded as impaired if the carrying amount
is greater than the estimated recoverable amount as determined in
impairment tests. Impairment losses are recognised in profit or loss.
2.11.4 Financial assets at fair value through profit or loss
These assets are measured at fair value, with changes in fair value
recognised in profit or loss.
Financial assets are recognised at the settlement date.
This category includes:
2.11.1 Available-for-sale financial assets
p assets classified as held for trading, which comprise assets acquired
for the purpose of reselling them in the near term at a profit or which
are part of a portfolio of financial instruments that are managed
together and for which there is a pattern of short-term profit taking;
These assets are initially recognised at fair value, which corresponds to
acquisition cost plus transaction costs. At subsequent balance sheet
dates, available-for-sale financial assets are remeasured at fair value.
Changes in fair value are recognised in equity, and are not transferred to
the income statement until the asset in question is sold.
The TF1 group classifies in this category equity interests in companies
over which the Group exercises neither control nor significant influence.
The fair value of listed securities is determined using the fair value
measurement principles described in Note 12. Unlisted securities whose
fair value cannot be measured reliably are carried at cost.
Available-for-sale financial assets are tested individually for impairment.
Unrealised gains and losses are recognised in equity. If there is objective
evidence of a significant and prolonged decline in value, an impairment
loss is recognised in the income statement.
2.11.2 Loans and receivables
These financial assets are initially recognised at fair value plus directly
attributable transaction costs. At each subsequent balance sheet date,
they are measured at amortised cost using the effective interest method.
114
This category includes trade debtors, other debtors, loans receivable,
deposits and caution money, loans and advances to non-consolidated
equity investments, cash, and current account advances to associates
and non-consolidated entities.
p assets designated by the Group on initial recognition as financial
instruments at fair value through profit or loss.
2.12 PROGRAMMES AND BROADCASTING RIGHTS
In order to secure programming schedules for future years, the TF1
group enters into binding contracts, sometimes for a period of several
years, under which the Group acquires (and the other party agrees to
deliver) programme rights and sports transmission rights.
A programme is treated as ready for transmission and recognised
in inventory under “Programmes and broadcasting rights” when the
following two conditions are met: technical acceptance (for in-house and
external productions), and opening of rights (for external productions).
In the case of rights and programmes for which these two criteria have
not been met (programmes not yet delivered, sports rights for which
the right to broadcast is not activated until the date of the event, etc.),
the Group takes the view that it does not control the asset, since
it has neither the right nor the ability to broadcast the programme.
Consequently, these rights are not recognised in the balance sheet.
However, any advance payments made to acquire such rights are
recognised as supplier prepayments.
The line “Programmes and broadcasting rights” in the balance sheet
includes:
p in-house productions, made by TF1 group companies for TF1
channels;
p external productions, comprising broadcasting rights acquired by the
TF1 group’s channels and co-production shares of broadcasts made
for the TF1 group’s channels.
The value of programmes and broadcasting rights is measured as
follows:
4
Programmes that have not been broadcast and the rights to which have
expired are written off as a component of current operating profit, and
any previously-recognised provisions are reversed.
Rights ordered under irrevocable contracts but not yet available
for transmission (see above) are disclosed in Note 11, in the section
relating to contracts entered into by TF1 to secure future programming
schedules, and are priced at the contractual amount (or the estimated
future cash outflow in the case of output deal contracts) less any
advance payments made.
2.13 FINANCIAL ASSETS USED FOR TREASURY
MANAGEMENT PURPOSES
p in-house production: at overall production cost (direct costs plus a
portion of indirect production costs);
Financial assets used for treasury management purposes are securities
held for trading purposes which although they are monetary investments
do not qualify as cash equivalents. They are classified as financial assets
at fair value through profit or loss held for trading.
p broadcasting rights and co-productions: at purchase cost, less
consumption for the year calculated at each balance sheet date.
2.14 CASH AND CASH EQUIVALENTS
TF1 SA programmes (which account for most of the Group’s programme
inventory) are deemed to have been consumed as transmitted. If they
are acquired for a single transmission, they are regarded as having been
consumed in full at the time of this transmission. If they are acquired for
two or more transmissions, consumption is calculated according to the
type of programme using the rules described below, unless otherwise
specified in the acquisition contract:
RULES BY TYPE OF PROGRAMME
Dramas with a
Other
running time
Films, TV programmes and
of at least 52 movies, serials
broadcasting
minutes and cartoons
rights
1st transmission
nd
2 transmission
80%
50%
100%
20%
50%
-
“Other programmes and broadcasting rights” in the table above refers
to children’s programmes (other than cartoons), entertainment shows,
plays, factual and documentary programmes, news, sport, and dramas
with a running time of less than 52 minutes.
A provision for impairment is recorded once it becomes probable that a
programme will not be transmitted, or if the contractual value at which
it was recognised in inventory exceeds the value attributable to it using
the rules described above. Probability of transmission is assessed on
the basis of the most recent programming schedules approved by
management. If rights are resold, a provision is recorded once the sale
is probable to cover any excess of the value at which the rights were
initially recognised in inventory (or the amount of advance payments)
over the actual or estimated selling price.
The line “Cash and cash equivalents” in the balance sheet comprises
cash, cash equivalents, and debit balances on treasury current accounts.
Cash consists of liquidity available in bank current accounts and sight
deposits. Cash equivalents are assets held in order to meet short-term
treasury needs. Investments qualify as cash equivalents if they are readily
convertible into cash, are subject to an insignificant risk of changes in
value, and have a maturity of less than three months. Treasury current
accounts represent cash invested with non-consolidated equity
investees or with associates, the uneliminated portion of treasury
current accounts with companies consolidated by the proportionate
consolidation method, and current accounts with other Bouygues group
entities.
Cash and treasury current accounts are classified in the “Loans and
receivables” category and carried at amortised cost.
2.15 HELD-FOR-SALE ASSETS
A non-current asset or a group of assets and liabilities is classified as
“held-for-sale” if its carrying amount will be recovered principally through
a sale transaction rather than through continuing use, and a sale is
highly probable. If material, such assets and asset groups are reported
separately from other assets or asset groups, and are measured at the
lower of their carrying amount or fair value less costs to sell.
An operation is treated as discontinued or held-for-sale when it is a
separate line of business that is material to the Group, and either (i) the
criteria for classification as a held-for-sale asset are met or (ii) it has been
sold by the TF1 group.
Discontinued and held-for-sale operations are presented on a separate
line in the income statement for each of the periods reported, showing
the post-tax profit or loss of discontinued or held-for-sale operations
until the date of sale and the post-tax gain or loss arising from the sale
of such operations or from remeasuring the assets and liabilities of such
operations at fair value less costs to sell.
115
4
If material, cash flows relating to discontinued and held-for-sale
operations are shown in a separate section at the foot of the consolidated
cash flow statement for all the periods reported.
2.16 TREASURY SHARES
Treasury shares acquired by the TF1 group are deducted from
consolidated equity. No gains or losses arising on the purchase, sale or
cancellation of treasury shares are recognised in the income statement.
2.17 FINANCIAL LIABILITIES
Financial liabilities are classified in one of two categories: financial
liabilities at fair value through profit or loss, and financial liabilities at
amortised cost.
Financial liabilities at fair value through profit or loss comprise:
p liabilities regarded as held for trading, comprising liabilities incurred
principally with a view to repurchasing them in the near term;
p liabilities designated by the Group on initial recognition as financial
instruments at fair value through profit or loss.
The TF1 group’s non-derivative financial liabilities mainly comprise bond
issues, borrowings (including credit facilities contracted with banks or
with the Group), treasury current accounts with credit balances, bank
overdrafts, and finance lease obligations.
These liabilities are measured at amortised cost.
Where a financial liability is wholly or partially hedged by an interest rate
instrument, the hedged portion is accounted for under hedge accounting
rules (see Note 2-18-1).
2.17.1 Bond issues
Bond issues are initially recognised at the amount of the issue proceeds
net of issue costs.
Subsequently, bond issues are measured at amortised cost using the
effective interest method. The effective interest rate takes account
of issue costs and redemption premium, which are recognised in the
balance sheet as a deduction from the nominal value of the bond
issue and amortised using the effective interest method over the term
of the bond issue. Amortisation and interest charges are recognised
in the income statement under “Expenses associated with net debt”.
The portion of accrued interest falling due within less than one year is
recorded in “Current debt”.
2.17.2 Other financial liabilities
Other current and non-current financial liabilities comprise borrowings,
treasury current accounts with credit balances, bank overdrafts and
finance lease obligations, and are measured at amortised cost.
p Commitments to buy out minority shareholders:
116
Commitments to buy out minority shareholders are recognised as a
financial liability, in accordance with IAS 32.
Since January 1, 2010, the effective date of the amended IAS 27, TF1
has elected to recognise these financial liabilities by debiting equity, with
no impact on the recognition of minority interests. Apart from discounting
effects (recognised in “Expenses associated with net debt”), the effects
of subsequent changes in the liability are also recognised in equity.
For commitments to buy out minority shareholders relating to a business
combination completed prior to January 1, 2010, TF1 recognised the
excess of the amount of the liability over the carrying amount of the
related minority interests, and subsequent changes in the fair value of
the liability (other than discounting effects), as goodwill.
2.18 DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are initially recognised at fair value as of
the inception date of the contract, and are subsequently measured at
fair value in accordance with IAS 39.
The TF1 group uses derivative financial instruments such as swaps,
interest rate options, forward currency purchases and currency options
to hedge its exposure to fluctuations in interest rates and exchange
rates. Group policy is to trade on the financial markets solely for
hedging purposes related to its business activities, and not to trade for
speculative purposes.
2.18.1 Derivative financial instruments designated
as hedges
For hedge accounting purposes, a hedge may be classified into one of
two categories:
p fair value hedges, which hedge the exposure to changes in fair value
of a recognised asset or liability, or a firm commitment, such as a
fixed-rate loan or borrowing or an asset or liability denominated in a
foreign currency;
p cash flow hedges, which hedge the exposure to variability in cash
flows attributable to:
− an asset or liability such as a floating-rate loan or borrowing,
− a highly probable forecast transaction, or
− foreign exchange risk relating to a firm commitment.
At the inception of a hedge, TF1 formally designates the financial
instrument to which hedge accounting will apply, and documents:
p the hedging relationship;
p the effectiveness of the hedging relationship, by conducting
effectiveness tests both at inception and throughout all the financial
reporting periods during which the hedge is designated.
4
Hedging instruments that qualify for hedge accounting are accounted
for as follows:
− vested benefit entitlements under collective agreements for each
category of employee based on length of service,
p fair value hedges: changes in the fair value of the hedging instrument
are recognised in profit or loss for the period symmetrically with
changes in the fair value of the hedged item. The hedging instrument
and the hedged item are both recognised in the balance sheet at fair
value;
− staff turnover rate, calculated using historical average data for
employees leaving the Group,
p cash flow hedges: the gain or loss (net of taxes) arising on the effective
portion of the hedging instrument is recognised in equity, and the gain
or loss on the ineffective portion is recognised in profit or loss. The
amounts recognised in equity are taken to profit or loss in the period
in which the hedged transaction affects the income statement.
2.18.2 Derivative financial instruments not designated
as hedges
Gains and losses arising from changes in the fair value of derivatives not
designated as hedges within the meaning of IAS 39 are recognised in
the income statement.
2.19 PROVISIONS AND CONTINGENT LIABILITIES
A provision is recorded when a legal or constructive obligation to a
third party arising from a past event will certainly or probably result in
an outflow of resources that can be measured reliably. Provisions are
reviewed at each balance sheet date, and adjusted where necessary to
reflect the best estimate of the obligation as of that date.
Contingent liabilities are obligations whose existence will be confirmed
only by the occurrence of future events or for which the outflow of
resources cannot be measured reliably. No provision is recorded for
contingent liabilities.
2.19.1 Non-current provisions
The main types of non-current provisions are:
p Provisions for retirement benefits
The Group’s employees are entitled to retirement benefits under definedcontribution and defined-benefit plans, which may be partially managed
by the Group’s pension funds.
The employees of the TF1 group’s French subsidiaries belong to general
and top-up French pension schemes. These are defined-contribution
plans, under which the TF1 group’s obligation is limited to the payment
of a periodic contribution based on a specified percentage of staff costs.
These contributions are expensed in profit or loss for the period under
“Staff costs”.
The pension cost recognised for defined-benefit plans is determined
using the projected unit credit method at the expected retirement date,
based on final salary, and taking account of:
− salaries and wages, including a coefficient for employer’s social
security charges as currently payable,
− an annual salary inflation rate,
− life expectancy of employees, determined using statistical tables,
− a discount rate, applied to the obligation and reviewed annually.
The Group’s obligation is partially covered by an insurance contract.
The provision for retirement benefits recognised in the balance sheet
represents the total obligation less the value of this contract.
Actuarial gains and losses arise on defined-benefit post-employment
benefit plans as a result of changes in the actuarial assumptions used
to measure the obligation and plan assets from one period to the next,
and of differences between actual market conditions and the expected
market conditions used in the assumptions. With effect from January 1,
2007, the TF1 group has recognised actuarial gains and losses directly
in equity (net of deferred taxes) in the period in which they occur, in
accordance with the option offered by the amendment to IAS 19.
p Provisions for litigation, claims and risks
These provisions cover litigation, claims and non-recurring risks for
which settlement occurs outside the normal operating cycle.
They are measured as the probable outflow of resources resulting from
ongoing litigation or claims arising from an event prior to the balance
sheet date. Provisions for litigation and claims include the estimated
amount payable to third parties in respect of litigation and claims.
They also include provisions for charges relating to disputes with tax
and social security authorities; in such cases, the amount shown on
reassessment notices issued by the authorities is provided for unless the
company concerned regards it as highly probable that it will successfully
defend its position against the authorities.
2.19.2 Current provisions
Current provisions mainly comprise provisions for litigation and claims
arising in the normal operating cycle and for which settlement will
probably occur within twelve months. They are measured in the same
way as non-current provisions (see above).
2.20 REVENUE RECOGNITION
The TF1 group recognises revenue when:
p it is probable that the economic benefits associated with the
transaction will flow to the Group;
p the amount of revenue can be measured reliably;
p at the transaction date, it is probable that the amount of the sale will
be recovered.
117
4
The specific revenue recognition policies applied to each business line
are as follows:
p sales of advertising airtime are recognised on transmission of the
advertisement or commercial:
− for sales of advertising airtime on media not owned by the Group,
TF1 recognises the agency commission as revenue unless it
has offered the media owner a recovery guarantee for selling
the airtime, in which case TF1 recognises as revenue the gross
amount of airtime sales invoiced to the advertisers,
− the TF1 group makes marginal use of barter transactions involving
advertising with media other than television, such as radio or print
media. These transactions, which are exchanges of dissimilar
services within the meaning of SIC 31, are reported on a nonnetted basis, with matching amounts recognised as income in
“Revenue” and as expenses in “External expenses”;
p fees charged by theme channels to cable and satellite operators
that broadcast them are calculated on a per subscriber basis or as
a fixed annual fee invoiced to the operator. Subscriber-based fees
are recognised monthly on the basis of statements received from the
operator. Fixed annual fees are recognised as revenue on a straightline basis over the course of the year;
which they relate, starting from the date on which the production is
completed or licensed for distribution.
2.22 NON-CURRENT OPERATING INCOME AND
EXPENSES
These lines comprise a very limited number of income and expense
items, which are unusual and occur infrequently but are material to the
consolidated financial statements. TF1 reports these items separately in
its income statement in order to give users of the financial statements a
better understanding of the Group’s ongoing operational performance.
2.23 COST OF NET DEBT
“Cost of net debt” represents “Expenses associated with net debt”, net
of “Income associated with net debt”.
“Expenses associated with net debt” comprise:
p interest expense on current and non-current debt;
p amortisation of financial assets and liabilities measured at amortised
cost;
p expenses arising from interest rate hedges;
p sales of audiovisual rights under licence are recognised when the
licensee has acknowledged that the programme conforms with the
terms of the licence (technical acceptance);
p revenue from sales of merchandise and products by the Group’s
publishing and distribution activities is reported net of (i) provisions for
expected goods returns and (ii) paybacks made in connection with
some distribution contracts;
p in the case of services that require recourse to technical serviceproviders, the Group recognises as revenue the cost of the service
borne by the end user if the Group bears the financial, after-sales
and legal risks associated with the service. In other cases, where
the Group regards itself as acting purely as agent, only the net fee
collected is recognised as revenue.
Other operating revenues mainly comprise sales-based royalties
invoiced under licence agreements.
The activities carried on by the TF1 group do not to any material extent
include sales comprising separately identifiable components within the
meaning of IAS 18.
2.21 GRANTS
Grants received by the TF1 group mainly comprise grants received by
the Group’s production companies from funds set up to support the
audiovisual industry (in particular grants awarded by the French National
Centre for Cinematography).
Grants awarded by audiovisual industry support funds are initially
recorded as deferred income in “Trade and other creditors” on the
liabilities side of the balance sheet once the grant has been definitively
awarded. They are taken to the income statement under “Other
operating income” in line with the amortisation of the productions to
118
p expenses arising from the remeasurement of financial assets and
financial liabilities at fair value, such as changes in the fair value
of interest rate derivatives and changes in the fair value of cash
equivalents and financial assets used for treasury management
purposes;
p expenses arising on the disposal of assets used for treasury
management purposes.
Interest expense is recognised in the income statement in the period in
which it is incurred.
“Income associated with net debt” comprises:
p interest income associated with cash and cash equivalents and with
financial assets used for treasury management purposes;
p income arising from interest rate hedges;
p other revenues generated by cash equivalents and financial assets
used for treasury management purposes;
p income arising from the remeasurement of financial assets and financial
liabilities at fair value, such as changes in the fair value of interest
rate derivatives and changes in the fair value of cash equivalents and
financial assets used for treasury management purposes;
p income generated by the disposal of assets used for treasury
management purposes.
2.24 DEFERRED TAXATION
Deferred taxation is recognised using the liability method on all
temporary differences existing at the balance sheet date between the
carrying amount of assets and liabilities in the consolidated balance
sheet and their tax base, except in the specific cases mentioned in IAS
12 (primarily goodwill).
Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply to the period when the asset is realised or the
liability is settled, using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax assets arising on deductible temporary differences and on
the carry-forward of unused tax losses are recognised only to the extent
that it is probable that they can be offset against future taxable profits.
Taxes on items recognised directly in equity are taken to consolidated
reserves.
Deferred taxes are reported as non-current assets or non-current
liabilities in the balance sheet, after offset within each tax group.
2.25 EARNINGS PER SHARE
Basic earnings per share is obtained by dividing net profit for the period
by the weighted average number of shares outstanding during the
period.
All shares conferring unrestricted rights upon the shareholder are
included. Shares in the parent company held by the company itself or
by consolidated companies are excluded from the average number of
shares outstanding.
Diluted earnings per share is calculated by including all financial
instruments giving future access to the capital of the parent company,
whether these instruments are issued by the parent company itself
or by a subsidiary. The dilutive effect is calculated separately for each
instrument, based on the conditions prevailing at the balance sheet
date. Anti-dilutive instruments are excluded.
Non-dilutive share subscription option plans are excluded from this
calculation.
2.26 SHARE-BASED PAYMENT
TF1 has awarded share subscription option plans and considerationfree share allotment plans to its employees (see Note 32).
In accordance with IFRS 2, the cost of these equity-settled share-based
payment plans is recognised as an expense in “Staff costs”, with the
credit entry recognised in equity.
The total expense relating to share subscription option plans is measured
at the grant date of the options using the Black-Scholes-Merton model,
and is recognised over the vesting period.
The total expense relating to consideration-free shares is measured at
the allotment date (taking into account any specific terms and conditions
liable to affect fair value), and recognised over the vesting period on a
straight line basis.
4
2.27 OPERATING SEGMENTS
TF1 organises its operating activities into strategic business units, each
of which is managed appropriately to the nature of the products and
services sold and the specific economic environment. This segmentation
serves as the basis for the presentation of internal management data,
and is also used by the Group’s operational decision-makers to monitor
performance. The operating segments reported by the Group are
those reviewed by the chief operational decision-maker; they are not
aggregated for segment reporting purposes.
Management assesses performance on the basis of current operating
profit. Segmental results, assets and liabilities include items directly
or indirectly attributable to the relevant segment. Segmental capital
expenditure represents total acquisitions of property, plant and
equipment and intangible assets as recognised in the corresponding
balance sheet line items. Inter-segment sales and transfers are
conducted on an arm’s length basis.
The TF1 group reports the following operating segments:
Broadcasting France
This segment includes the TF1 channel, associated and spin-off
activities regarded as inseparable from this channel, other free-toair or pay-TV channels broadcasting primarily to France, and Metro
France. Activities inseparable from TF1 include the in-house advertising
airtime sales agency and companies involved in the production or coproduction of programmes intended primarily for the TF1 channel (such
as TF1 Production).
Audiovisual Rights
Subsidiaries whose principal activity is the production, publishing or
distribution of audiovisual rights not exclusively intended for TF1 group
channels are included in this segment. Production activities include
delegated productions or co-productions of films. Publishing and
distribution activities include all media (CD, DVD, etc) and all channels
(cinemas, TV channels and all retail distribution channels).
This segment comprises subsidiaries involved in the development
and broadcasting of pay-TV programmes primarily broadcast outside
France.
Miscellaneous activities
This segment comprises all activities not included in any of the segments
described above and (as of December 31, 2011) the subsidiary SPS.
119
4
Note 3 Significant changes in scope of consolidation
The consolidated financial statements of the TF1 group for the year
ended December 31, 2012 include the financial statements of the
companies listed in Note 38.
3.1 SIGNIFICANT CHANGES IN SCOPE
OF CONSOLIDATION IN 2012
3.1.1 Change in percentage interest in the Eurosport group
entities and theme channels
As a result of the agreement with the Discovery Communications group
(see Note 1, “Significant events of 2012”), the percentage control held
by the TF1 group in the Eurosport group entities, and in the Ushuaïa TV,
Stylía, Histoire and TV Breizh pay-TV theme channels, has been 80%
since December 21, 2012. The 20% share of the net assets of these
entities acquired by the Discovery Communications group, amounting
to €102.6 million, is presented in consolidated shareholders’ equity
attributable to minority interests. The share of profits for the period from
December 22 to December 31, 2012, has not been allocated to minority
interests on grounds of immateriality.
3.1.2 Inclusion of Groupe AB in the scope of consolidation
as an associate by the equity method
TF1 has held a 33.5% equity interest in Groupe AB since April 2, 2007,
the other principal investor being Claude Berda.
On June 10, 2010, in connection with the acquisition by TF1 of the TMC
and NT1 channels from Groupe AB, TF1 granted Claude Berda a call
option entitling him to buy out TF1’s 33.5% interest in Groupe AB for its
estimated market value of €155 million. In accordance with IAS 27, TF1
therefore ceased to account for its equity interest in Groupe AB as an
associate by the equity method, instead recognising the equity interest
in the balance sheet as a non-current financial asset at a value of €155
million. TF1 elected to recognise subsequent changes in the fair value of
the equity interest in profit or loss, so that they would offset subsequent
changes in the fair value of the option (recognised in financial income or
expense, and in financial liabilities in the balance sheet).
The equity interest and the associated call option were valued on the
basis of (i) the consolidated net assets of Groupe AB as remeasured
at fair value in 2010, plus the profits of Groupe AB recognised since
that date (including depreciation and amortisation charged against
remeasured assets) and (ii) a multiple-based approach applicable to
Groupe AB.
Because no material change in the fair value of the equity interest
occurred during the life of the option, both the equity interest and the
option were maintained at their initial values, i.e. €155 million and zero
respectively.
As of the expiry date of the option (June 10, 2012), TF1’s equity interest
in Groupe AB was valued at €160.9 million. The fair value of the equity
interest was adjusted accordingly, and a symmetrical financial liability
120
(of €5.9 million) representing the fair value of the option was also
recognised. Because the option was not exercised, the financial liability
was extinguished, generating a gain (recognised in “Other financial
income”) in the financial statements for the six months ended June 30,
2012.
The option having expired, the TF1 group has regained the significant
influence that it used to exercise over Groupe AB.
Consequently, this equity interest is now once again accounted for as an
associate by the equity method, with effect from June 11, 2012.
3.1.3 Direct Optic Participations
In accordance with the terms of the agreements signed on March
1, 2011, Téléshopping converted into share capital a €2.5 million
current account balance owed to it by Direct Optic Participations.
This transaction took place on December 28, 2012, and increased
Téléshopping’s equity interest in Direct Optic from 25.4% to 47.8%. This
increased percentage has no impact on the role or power of TF1 vis-àvis Direct Optic Participations.
The investment continues to be accounted for as an associate by the
equity method in the consolidated financial statements.
3.2 SIGNIFICANT CHANGES IN SCOPE
OF CONSOLIDATION IN 2011
3.2.1 Acquisition of Metro France Publications
The acquisition of an additional 65.7% equity interest in Metro France
Publications from Metro International on July 28, 2011 gave the
TF1 group exclusive control over Metro France Publications. In the
consolidated financial statements for the year ended December 31,
2011, the interest in Metro France Publications – previously accounted
for as an associate by the equity method – was fully consolidated with
effect from July 28, 2011.
3.2.2 Divestment of the SPS group
Following the sale on May 2, 2011 of the TF1 group’s entire interest in
the SPS Group, the companies of the SPS Group ceased to be included
in the scope of consolidation with effect from that date.
3.2.3 Divestment of TCM Gestion and TCM DA
The 50% equity interests held in TCM DA and TCM Gestion were sold
on April 19, 2011. These entities, previously accounted for by the
proportionate consolidation method, were deconsolidated as of that
date.
3.2.4 Divestment of the 1001 Listes companies
Following completion of the sale of 1001 Listes and 1001 Listes Belgique
on February 4, 2011, these two entities were deconsolidated with effect
from January 1, 2011.
4
Note 4 Operations held for sale
Where the Group is in the process of selling an operation or significant
assets, these operations or assets are reported separately in accordance
with IFRS 5. The cash impact of material changes during the period is
disclosed in Note 30.2.
There were no operations or significant assets held for sale that required
to be reported separately under IFRS 5 either at December 31, 2012 or
at December 31, 2011.
Note 5 Interests in jointly controlled entities
The TF1 group owns interests in jointly controlled entities, a list of which
is provided in Note 38.
The table below shows the share of the assets, liabilities, revenue and
operating profit of these entities as included in the consolidated financial
statements.
TCM(1)
TF1 share
TF6 / Série Club
(€m)
2012
2011
23.1
22.6
-
-
8.0
7.0
-
-
TOTAL ASSETS
31.1
29.6
-
-
Shareholders’ equity
22.4
21.4
-
-
Non-current assets
Current assets
Non-current liabilities
2012
2011
-
1.4
-
-
8.7
6.8
-
-
TOTAL LIABILITIES & EQUITY
31.1
29.6
-
-
Revenue
14.4
12.8
-
-
-
(1.0)
-
(2.5)
Current liabilities
Current operating profit/(loss)
(1) TCM DA was divested on April 19; 2011.
121
4
Note 6 Segment information
6.1 INFORMATION BY OPERATING SEGMENT
The contribution of each operating segment to the consolidated financial statements was as follows:
(€m)
Broadcasting
France
Audiovisual
Rights
Broadcasting
International
Miscellaneous
Activities(6)
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2,084.8
2,134.8
129.8
115.5
406.0
367.9
-
1.5
2,620.6
2 619,7
155.1
266.5
(1.3)
(40.1)
56.6
65.2
-
(8.7)
210.4
282,9
(35.4)
(35.2)
(30.2)
(35.2)
(6.2)
(7.5)
-
(0.5)
(71.8)
(78,4)
2.0
(15.6)
(12.0)
(13.1)
(2.6)
(1.2)
-
-
(12.6)
(29,9)
(41.9)
-
(4.5)
-
(1.3)
-
-
-
(47.7)
-
(6.4)
(4.1)
-
(0.2)
-
-
-
(9.4)
(6.4)
(13,7)
-
-
-
-
-
-
-
-
-
-
825.5
835.5
28.4
44.2
367.0
367.4
-
-
1,220.9
1 247,1
Total
TF1
INCOME STATEMENT (EXTRACT)
Revenue
Depreciation and amortisation, net
Provisions and impairment, net
Non-current operating income
and expenses(1)
Share of profits/(losses)
of associates(2)
Net profit from discontinued/heldfor-sale operations
BALANCE SHEET
Segmental assets(3)
Segmental liabilities
(4)
Investments in associates(7)
(5)
Capital expenditure
62.5
72.5
23.2
17.1
7.1
7.0
-
-
92.8
96,6
161.1
1.3
-
-
-
-
-
-
161.1
1,3
29.2
90.9
22.4
27.1
5.0
4.2
-
0.2
56.6
122,4
(1) In 2012, non-current operating income and expenses consisted of the non-recurring exceptional costs generated by phase II of the optimisation plan.
(2) The share of profits/losses from associates reported by each segment is as follows:
• Broadcasting France: the €6.4 million share of losses for 2012 relates primarily to the interests in Groupe AB, WBTV and Direct Optic Participations (for details see Note 10, “Investments in
associates”); the €4.1 million share of losses for 2011 relates primarily to the interest in WBTV.
• Miscellaneous Activities: for 2011, the share of losses relates to Metro France Publications, in which the TF1 group held an interest of 34.3% until July 28, 2011.
(3) Segmental assets include audiovisual rights, other intangible assets, goodwill, and property, plant and equipment.
(4) Segmental liabilities include current and non-current provisions.
(5) See the “Capital Expenditure” table below for a reconciliation of capital expenditure with the consolidated cash flow statement.
(6) In 2011, this segment consisted of the SPS group, which was divested in the second quarter of 2011
(7) Investments in associates include Groupe AB with effect from June 11, 2012.
Capital expenditure
Reconciliation with the consolidated cash flow statement:
(€m)
Capital expenditure
Investment grants received
Change in creditors related to acquisitions of intangible assets
122
2012
2011
56.6
122.4
(11.2)
(12.7)
9.0
(9.2)
Change in creditors related to acquisitions of property, plant & equipment
(3.0)
0.4
Cash outflows on acquisitions of property, plant & equipment and intangible assets
51.4
100.9
4
Income statement by function
Broadcasting
France
(€m)
Revenue
2012
Audiovisual
Rights
2011
2012
Broadcasting
International
2011
2012
Miscellaneous
Activities
2011
2012
Total
TF1
2011
2012
2011(1)
2,084.8
2,134.8
129.8
115.5
406.0
367.9
-
1.5
2,620.6
2,619.7
(1,473.3)
(1,453.7)
(99.4)
(119.0)
(221.3)
(192.5)
-
(10.2)
(1,794.0)
(1,775.4)
(5.3)
(7.3)
-
-
-
-
-
-
(5.4)
(7.3)
Selling expenses
(126.5)
(136.6)
(8.1)
(15.1)
(73.7)
(62.9)
-
-
(208.2)
(214.5)
Administrative expenses
(282.6)
(270.7)
(19.1)
(21.5)
(53.2)
(47.3)
-
-
(354.9)
(339.5)
CURRENT OPERATING PROFIT/
(LOSS)
197.1
266.5
3.2
(40.1)
57.8
65.2
-
(8.7)
258.1
283.0
Cost of sales
Research and Development
expenses
(1) Following the introduction of new accounting and financial information systems in 2011 and 2012, the allocation of costs by function has been altered; the new allocation has been applied
retrospectively to the 2011 figures2011.
6.2 INFORMATION BY GEOGRAPHICAL SEGMENT
For geographical segment reporting purposes, segmental revenue is allocated according to the location of the customer, while segmental assets and
capital expenditure are allocated according to the location of the asset.
France
(€m)
Continental Europe
Other Countries
Total TF1
Revenue
2011
2012
2011
2012
2011
2012
2011
Segmental assets
2,171.0
2,226.7
388.2
344.4
61.4
48.6
2,620.6
2,619.7
Capital expenditure
1,217.8
1,243.5
3.0
3.5
0.1
0.1
1,220.9
1,247.1
56.0
120.4
0.6
2.0
-
-
56.6
122.4
Investissements bruts d’exploitation
The TF1 group was not dependent on any one customer for more than 10% of its consolidated revenue in either the year ended December 31, 2012
or the year ended December 31, 2011.
Note 7 Goodwill
Goodwill is allocated to cash generating units (CGUs) as follows:
(€m)
Goodwill at January 1, 2012
Broadcasting
France
Audiovisual Rights
Broadcasting
International
Total
538.0
-
336.3
874.3
Acquisitions
-
-
-
-
Disposals
-
-
-
-
Reclassifications
-
-
-
-
Impairment
-
-
-
-
Other
-
-
-
-
Goodwill at December 31, 2012
538.0
-
336.3
874.3
Gross value
548.3
-
336.3
884.6
Accumulated impairment
(10.3)
-
-
(10.3)
During the third quarter of 2012, the TF1 group finalised the purchase price allocation of Metro France (consolidated since July 28, 2011); the final
amount of goodwill recognised on this acquisition was €9.1 million.
Based on impairment tests conducted using the method described in Note 2.10, no impairment of goodwill was identified at December 31, 2012.
123
4
(€m)
Goodwill at January 1, 2011
Acquisitions
Disposals
Broadcasting
France
Audiovisual
Rights
Broadcasting
International
Miscellaneous
Activities
1001 Listes
528.9
-
336.3
18.3
883.5
9.1
-
-
-
9.1
-
-
-
(18.3)
(18.3)
Reclassifications
-
-
-
-
-
Impairment
-
-
-
-
-
Other
-
-
-
-
-
538.0
-
336.3
-
874.3
Gross value
548.3
-
336.3
-
884.6
Accumulated impairment
(10.3)
-
-
-
(10.3)
Goodwill at December 31, 2011
In 2011, the “Acquisitions” line includes goodwill arising from the
acquisition of control over Metro France on July 28, 2011, amounting
to €9.1 million (based on a 100% interest, including goodwill on the
previously-held equity interest).
p the effect of future major sporting events;
Impairment testing of goodwill
p the improvement in available funds that allows the Group to envisage
potential new developments.
The recoverable amounts of the Broadcasting France and Broadcasting
International cash generating units (CGUs) were determined by
calculating the value in use using the discounted cash flow (DCF)
method, based on three-year cash flow projections compiled from
plans and budgets approved by the TF1 Board of Directors. Cash flows
beyond the projection horizon were extrapolated at a perpetual growth
rate that reflects past experience and incorporates prudent assumptions
about the growth potential of the markets in which each CGU operates,
and their competitive positions in those markets.
The business plans used in impairment testing are prepared on the basis
of revenue growth rates and operating margins consistent with actual
data for the last 5 years, and build in a number of factors including:
p the impact of the economic situation on advertising spend in the
particularly unsettled current environment;
p the ongoing adaptation of the TF1 channel business model, including
the implementation of phase II of the optimisation plan, which aims
to achieve €85 million of new recurring savings by end 2014 on top
of the €155 million of recurring savings already generated between
2007 and 2011;
124
p the development of the free-to-view offering across all free media,
including the free-to-view DTT channels and digital activities (MYyTF1)
driven by new technologies;
However, these business plans do not build in the expected synergies
from the partnership with the Discovery Communications group.
The perpetual growth rates used for impairment testing at end 2012
were 2% for the Broadcasting France CGU and 3% for the Broadcasting
International CGU. The after-tax discount rate applied at end 2012 was
8.21%, and was determined by reference to external data sources using
the method described in Note 2-10-1.
For each CGU, an analysis was performed of the sensitivity of these
calculations to changes in the discount rate, the perpetual revenue
growth rate and the normative current operating margin (taken
individually or in combination). The scenarios used in this analysis
include the impact on perpetual cash flows of a reduction of up to 1
point in the revenue growth rate, a reduction of up to 2 points in current
operating margin, and an increase of up to 1 point in the discount rate.
These analyses identified no probable scenario in which the recoverable
amount of any CGU would fall below the carrying amount of the
corresponding assets.
4
Note 8 Intangible assets
8.1 AUDIOVISUAL RIGHTS
Movements during the year ended December 31, 2012 were as follows:
2012 (€m)
January 1
Increases
Decreases
Changes in scope
of consolidation,
reclassifications
Gross value
1,112.9
31.1
(0.8)
(5.5)
1,137.7
Amortisation
(1,000.8)
(40.1)
0.5
(0.3)
(1,040.7)
(41.3)
(14.2)
13.7
-
(41.8)
70.8
(23.2)
13.4
(5.8)
55.2
December 31
Impairment
Audiovisual rights
December 31
Movements during the year ended December 31, 2011 were as follows:
2011 (€m)
January 1
Increases
Decreases
Changes in scope
of consolidation,
reclassifications
Gross value
1,090.6
40.5
(1.5)
(16.7)
1,112.9
Amortisation
(974.3)
(45.4)
1.1
17.8
(1,000.8)
Impairment
(38.8)
(15.8)
17.9
(4.6)
(41.3)
77.5
(20.7)
17.5
(3.5)
70.8
Audiovisual rights
The movements reported in “Changes in scope of consolidation, reclassifications” mainly comprise the deconsolidation of TCM DA following the
divestment of this business on April 19, 2011, and the first-time consolidation of Sofica Valor 6 in the year ended December 31, 2011.
The table below shows the maturities of audiovisual rights acquisition contracts entered into by TF1 to secure future programming schedules:
Audiovisual rights
(€m)
Less than 1 year
1 to 5 years
More than
5 years
Total
2012
19.6
0.2
-
19.8
2011
13.7
0.3
-
14.0
8.2 OTHER INTANGIBLE ASSETS
2012 (€m)
Indefinite-lived trademarks
January 1
Increases
Decreases
Changes in scope
of consolidation,
reclassifications
52.0
-
-
-
December 31
52.0
Concessions, patents & similar rights
40.4
2.5
(1.0)
2.9
44.8
Other
14.6
6.1(1)
(0.7)
(2.7)
17.3
107.0
8.6
(1.7)
0.2
114.1
-
(0.6)
-
-
(0.6)
Amortisation
(34.3)
(3.6)
0.4
-
(37.5)
Impairment
(1.5)
-
0.1
-
(1.4)
(35.8)
(4.2)
0.5
-
(39.5)
71.2
4.4
(1.2)
0.2
74.6
Gross value
Impairment of indefinite-lived trademarks
Amortisation and impairment
(1) The increase in the gross value of other intangible assets was mainly due to expenditure on internal IT projects (SAP).
125
4
The €0.6 million carrying amount of the Excessif trademark was written down in full as of December 31, 2012.
Apart from the Excessif trademark, impairment tests performed on the Group’s other indefinite-lived trademarks (using the method described in
Note 2.10) did not indicate any evidence of impairment as of December 31, 2012.
2011 (€m)
Decreases
Changes in scope
of consolidation,
reclassifications(3)
December 31
January 1
Increases
Indefinite-lived trademarks
52.0
-
-
-
52.0
Astra satellite user rights(2)
18.9
-
(18.9)
-
-
Concessions, patents & similar rights
40.3
1.2
(0.5)
(0.6)
40.4
Other
14.3
5.9(1)
(0.6)
(5.0)
14.6
125.5
7.1
(20.0)
(5.6)
107.0
-
-
-
-
-
Astra satellite user rights
(17.8)
(1.1)
18.9
-
-
Amortisation
(33.0)
(3.6)
0.4
1.9
(34.3)
Gross value
Impairment of indefinite-lived trademarks
Impairment
Amortisation and impairment
(4.8)
-
-
3.3
(1.5)
(55.6)
(4.7)
19.3
5.2
(35.8)
69.9
2.4
(0.7)
(0.4)
71.2
(1) The increase in the gross value of other intangible assets was mainly due to expenditure on internal IT projects (SAP).
(2) The Astra contract expired in 2011 and was replaced by an operating lease.
(3) Mainly comprising the effect of the deconsolidation of SPS.
The impairment tests performed on indefinite-lived trademarks as of December 31, 2011 indicated no evidence of impairment.
Note 9 Property, plant and equipment
The table below shows movements in property, plant and equipment, and in depreciation and impairment, during the year ended December 31, 2012:
2012 (€m)
Land
Increases
Decreases
December 31
60.9
-
-
-
60.9
Buildings
101.3
-
-
-
101.3
Technical facilities
192.0
9.5
(4.5)
(7.5)
189.5
20.0
-
(0.2)
10.6
30.4
112.2
6.2
(2.5)
(1.2)
114.7
2.0
1.2
-
(2.0)
1.2
Gross value
488.4
16.9
(7.2)
(0.1)
498.0
Buildings
(15.2)
(2.4)
0.1
-
(17.5)
(155.2)
(14.0)
4.6
6.5
(158.1)
(10.9)
(5.8)
0.1
(7.1)
(23.7)
Technical facilities held under finance leases
Other property, plant and equipment
Property, plant & equipment under construction
126
January 1
Changes in scope
of consolidation,
reclassifications
(76.3)
(10.0)
3.8
0.6
(81.9)
Depreciation and impairments
(257.6)
(32.2)
8.6
-
(281.2)
230.8
(15.3)
1.4
(0.1)
216.8
4
The table below shows movements in property, plant and equipment, and in depreciation and impairment, during the year ended December 31, 2011:
2011 (€m)
January 1
Increases
Decreases
Changes in scope
of consolidation,
reclassifications
45.7
15.2
-
-
60.9
58.0
43.3
-
-
101.3
201.6
7.9
(15.5)
(2.0)
192.0
Land(1)
(1)
Buildings
Property, plant & equipment under construction
Gross value
Buildings
December 31
15.4
-
(0.3)
4.9
20.0
119.5
7.7
(11.9)
(3.1)
112.2
1.9
0.6
-
(0.5)
2.0
442.1
74.7
(27.7)
(0.7)
488.4
(13.0)
(2.2)
-
-
(15.2)
(156.6)
(15.0)
15.6
0.8
(155.2)
(6.5)
(3.1)
0.3
(1.6)
(10.9)
(79.9)
(9.7)
11.8
1.5
(76.3)
Depreciation and impairments
(256.0)
(30.0)
27.7
0.7
(257.6)
186.1
44.7
-
-
230.8
Total
(1) On December 21, 2011, the TF1 group paid €58.5 million to acquire a property (previously 100% rented) occupied by staff from TF1 SA and LCI.
Note 10 Investments in associates
The table below gives a breakdown of investments in associates:
(€m)
Country
Groupe AB(4)
WBTV(1)
Metro France
Publications(2)
Other(3)
France
Belgium
France
France
January 1, 2011
-
2.8
11.1
-
13.9
Share of profit/(loss), net of dividends received
-
(3.8)
(1.5)
(0.5)
(5.8)
Impairment losses
-
-
(7.9)
-
(7.9)
Changes in scope of consolidation and reclassifications
-
-
(1.7)
1.5
(0.2)
Provision for risks
-
1.0
-
0.3
1.3
December 31, 2011
-
-
(0.0)
1.3
1.3
(1.4)
(0.7)
-
(0.7)
(2.8)
-
(2.0)
-
(1.6)
(3.6)
160.9
3.7
-
2.6
167.2
-
(1.0)
-
-
(1.0)
159.5
-
(0.0)
1.6
161.1
Share of profit/(loss), net of dividends received
Impairment losses
Provision for risks
December 31, 2012
(1) Under the terms of an agreement with Claude Berda and Groupe AB signed in November 2012, the TF1 group subscribed €3.7 million for its share of a capital increase carried out by WBTV. On
completion of this transaction, the TF1 group also agreed to sell its 49% equity interest in WBTV to Claude Berda before March 31, 2013 for €1, thereby generating an additional impairment loss of €2
million as of December 31, 2012.
(2) Metro France Publications has been fully consolidated since July 28, 2011. In 2011, the impact of remeasuring Metro France Publications at fair value on acquisition of control was recognised by an
impairment loss taken against the carrying amount of the equity-accounted investment.
(3) Primarily Direct Optic Participations: €1.6 million in 2012 (47.8% equity interest held), €1.5 million in 2011 (25.4% equity interest held). This interest was covered by an impairment provision of €1.6
million as of December 31, 2012.
(4) This entity has been included in the consolidation since June 11, 2012 (see Note 1-3, “Groupe AB”).
127
4
The table below gives summary information about material investments in associates:
Groupe AB(1)(2)
TF1 group share
(€m)
Non-current assets
Current assets
WBTV(2)
2012
2011
2012
2011
126.2
138.9
1.1
6.1
86.0
75.3
0.9
1.4
TOTAL ASSETS
212.2
214.2
2.0
7.5
Shareholders’ equity
159.9
161.2
(11.7)
(6.7)
Non-current liabilities
20.3
24.4
6.2
6.2
Current liabilities
TOTAL LIABILITIES AND EQUITY
32.0
28.6
7.5
8.0
212.2
214.2
2.0
7.5
Revenue
41.7
45.8
2.2
2.8
12.8
18.8
(0.9)
(1.9)
(1) Included in the consolidation with effect from June 11, 2012.
(2) 2011 and 2012 figures are based on accounts to end September (the most recent accounts available), and equity interests of 33.5% for Groupe AB and 49% for WBTV.
Figures relating to other associates are not material for the years ended December 31, 2012 and 2011.
Note 11 Programmes and broadcasting rights
The table below shows the movement in programme and broadcasting rights inventory, valued in accordance with the accounting policy described in
Note 2.12.
(€m)
Jan. 1, 2011
Gross value
Net
movements
Change in scope
of consolidation,
reclassifications
Dec. 31, 2011
Net
movements
Change in scope
of consolidation,
reclassifications
Dec. 31, 2012
770.5
8.4
(1.4)
777.5
(30.0)
(1.0)
746.5
Impairment
(152.8)
8.1(2)
2.8
(141.9)
10.1(1)
0.5
(131.3)
Inventories
617.7
16.5
1.4
635.6
(19.9)
(0.5)
615.2
(1) €56.5 million of impairment losses charged, €66.6 million of impairment losses reversed.
(2) €49.4 million of impairment losses charged, €57.5 million of impairment losses reversed.
The programme and broadcasting rights inventory reported above is owned primarily by TF1 SA and the TF1 Acquisition de droits economic interest
grouping.
The table below shows the maturity of broadcasting and sports transmission rights acquisition contracts entered into by TF1 to secure future
programming schedules.
2012 (€m)
Programmes and broadcasting rights(1)
Less than 1 year
1 to 5 years
More than 5 years
Total
589.3
640.9
38.1
1,268.3
Sports transmission rights
188.5
349.0
-
537.5
TOTAL
777.8
989.9
38.1
1,805.8
1 to 5 years
More than 5 years
Total
(1) Some of these contracts were expressed in foreign currencies: €14.3 million in Swiss francs, €1.4 million in pounds sterling, and €360.9 million in U.S. dollars.
2011 (€m)
Programmes and broadcasting rights
Less than 1 year
(1)
582.4
851.9
76.8
1,511.1
Sports transmission rights
185.3
401.7
3.9
590.9
TOTAL
767.7
1,253.6
80.7
2,102.0
(1) Some of these contracts were expressed in foreign currencies: €18.9 million in Swiss francs, €3.1 million in pounds sterling, and €282.7 million in U.S. dollars.
128
4
Programmes and broadcasting rights relate mainly to TF1 SA (€468.0
million in 2012, vs. €623.6 million in 2011) and to the Acquisition de
Droits economic interest grouping (€728.2 million in 2012, vs. €809.3
million in 2011).
Sports transmission rights commitments relate mainly to TF1 SA and
TF1 DS (€187.4 million in 2012, vs. €260.3 million in 2011) and to
Eurosport (€350.1 million in 2012, vs. €330.6 million in 2011).
Note 12 Financial assets
12.1 CATEGORIES OF FINANCIAL ASSETS
The table below shows financial assets by category:
Financial assets at fair value through
profit or loss
2012 (€m)
Other non-current financial assets
Designated
at fair value
on initial
recognition
Held for
trading
-
-
Level(1)
Availablefor-sale
financial
assets
Loans and
receivables
Held-tomaturity
investments
Total
13.2
2.7
-
15.9
-
-
-
1,302.0
-
1,302.0
-
2.1
-
-
-
2.1
Currency derivatives
-
2.1
Interest rate derivatives
-
-
Financial assets used for treasury
management purposes
II
-
-
-
2.1
-
-
-
-
-
-
-
-
-
-
-
-
-
258.7
-
258.7
Loans and
receivables
Held-tomaturity
investments
Total
(1) See the section on “Fair value measurement methods for financial assets” below.
Financial assets at fair value through
profit or loss
2011 (€m)
Designated
at fair value
on initial
recognition
Held for
trading
Level (1)
Availablefor-sale
financial
assets
III
9.8
2.8
-
167.6
-
1,241.8
-
1,241.8
-
-
-
5.9
-
-
-
5.9
-
-
-
-
155.0
-
-
-
-
5.9
-
5.9
-
-
Financial assets used for treasury
management purposes
II
-
-
-
-
-
-
-
-
-
35.9
-
35.9
(1) See the section on “Fair value measurement methods for financial assets” below.
12.2 FAIR VALUE MEASUREMENT METHODS FOR
FINANCIAL ASSETS
p level I: measurement based on quoted prices in active markets;
The amended IFRS 7 establishes a three-level hierarchy of fair value
measurement methods for financial instruments:
p level III: measurement based on non-observable market parameters.
p level II: measurement based on observable market parameters;
129
4
No transfers between these levels were made in either 2012 or 2011.
AB was re-established; since that date, the equity interest has
been accounted for as an associate by the equity method. The
fair value of the interest as of June 11, 2012 was measured at
€160.9 million (see Note 3.1.2, “Inclusion of Groupe AB in the
scope of consolidation as an associate by the equity method”),
The fair value of financial instruments is where possible measured by
reference to the market price derived from trading on a national stock
exchange or over-the-counter market. Where no listed market price is
available, fair value is estimated using alternative measurement methods,
such as the discounted cash flow method, based on either observable
(level II) or non-observable (level III) parameters.
− other equity investments in non-consolidated companies are
classified as available-for-sale financial assets and measured
at acquisition cost, since their fair value cannot be measured
reliably;
The methods used by the TF1 group are as follows:
p equity investments in non-consolidated companies:
− Groupe AB: From July 1, 2010 to June 11, 2012,, the 33.5%
equity interest held by the TF1 group was measured at fair value
through profit or loss at a carrying amount of €155 million, since
a call option over this interest (exercisable on or before June 11,
2012) had been granted to the Groupe AB management team.
As of December 31, 2011, there was no material change in the
fair value of this asset (level III). On June 11, 2012, the option
expired without having been exercised, and consequently the
significant influence that TF1 previously exercised over Groupe
p derivatives: the fair value of interest rate derivatives and currency
derivatives is estimated using valuations obtained from bank
counterparties or from financial models generally used in the financial
markets, on the basis of market data as of the balance sheet date
(level II method);
p because of their short maturities, the carrying amount of trade and
other debtors, cash, and treasury current accounts is regarded as the
best approximation of their fair value.
12.3 OTHER NON-CURRENT FINANCIAL ASSETS
Other non-current financial assets comprise:
(€m)
Equity investments in non-consolidated companies
Loans and advances to non-consolidated companies
Loans
Deposits and caution money
12.3.1
2012
2011
13.2
164.8
0.7
0.7
-
-
1.9
2.1
15.8
167.6
Equity investments in non-consolidated companies
The main equity investments in non-consolidated companies break down as follows:
(€m)
% interest
at year-end
Gross value
2012
Gross value
2011
Impairment
2012
Impairment
Carrying
Carrying
2011 amount 2012 amount 2011
Groupe AB(1)
33.5%
-
155.0
-
-
-
155.0
A1 International
50.0%
12.8
12.8
(12.8)
(12.8)
-
-
En Direct Avec
13.3%
4.0
4.0
(4.0)
(4.0)
-
-
9.1%
3.5
3.5
-
-
3.5
3.5
Wikio
Prima TV
5.0%
1.4
1.4
-
-
1.4
1.4
27.4%
0.8
0.8
(0.8)
(0.8)
-
-
Sofica Valor 7
20.1%
3.4
-
-
-
3.4
-
Soread
11.6%
1.6
1.6
(1.6)
(1.6)
-
-
SHIP
Sylver
49.0%
3.7
3.7
-
-
3.7
3.7
TF1 Publications
99.9%
0.5
0.5
(0.5)
(0.5)
-
-
3.3
3.3
(2.1)
(2.1)
1.2
1.2
35.0
186.6
(21.8)
(21.8)
13.2
164.8
Other
Equity investments in nonconsolidated companies
(1) The TF1 group regained significant influence over Groupe AB on June 11, 2012 (see Note 1-3, “Groupe AB”).
Impairment tests were performed on all these investments, and indicated no evidence of impairment in 2012 or 2011.
130
4
12.4 TRADE AND OTHER DEBTORS
Gross value
2012
Impairment
2012
Trade debtors
800.2
(18.0)
782.2
750.5
Supplier prepayments(1)
220.7
(8.8)
211.9
189.4
(€m)
Carrying amount
2012
Carrying amount
2011
Other operating debtors(2)
239.6
-
239.6
232.1
Other debtors
156.8
(103.9)
52.9
42.8
Prepayments
15.4
-
15.4
27.0
1,432.7
(130.7)
1,302.0
1,241.8
(1) This line includes advance payments in respect of acquisitions of programmes and sports transmission rights.
(2) Primarily amounts due to the government, local authorities, employees and social security authorities.
(€m)
Impairment as of January 1
Additional provisions booked during the year
Reversals for debtors written off during the year
Recovered during the year
2012
2011
(126.8)
(117.5)
(24.4)
(34.2)
13.2
21.4
7.3
4.8
Impairment as of December 31
-
(1.2)
(130.7)
(126.7)
2012
2011
35.6
21.3
12.5 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise the following items:
(€m)
Cash
(1)
-
12.2
Treasury current accounts(2)
223.1
2.4
258.7
35.9
Money-market mutual funds
(1) In 2011, investments held by Sofica Valor 6.
(2) These accounts are with associates, jointly controlled entities, non-consolidated companies, and Bouygues group companies (including €222 million with Bouygues Relais).
131
4
Note 13 Consolidated shareholders’ equity
13.1 TF1 SHARE CAPITAL
As of December 31, 2012, the share capital of TF1 SA consisted of 210,624,321 fully paid ordinary shares. Movements in share capital during 2012
were as follows:
Number of shares
Number of shares outstanding
Number of treasury shares
Total number of shares
January 1, 2011
213,395,867
14,625
213,410,492
Capital increases
11,111
-
11,111
Purchases of treasury shares
(2,473,975)
2,473,975
-
-
(2,388,600)
(2,388,600)
January 1, 2012
210,933,003
100,000
211,033,003
Capital increases
3,000
-
3,000
Purchases of treasury shares
(1)
(311,682)
311,682
-
(411,682)
(411,682)
210,624,321
-
210,624,321
€0.20
€0.20
€0.20
December 31, 2012
Par value
(1) Treasury shares: see Note 13.2.3 on share buybacks below.
13.2 CHANGES IN EQUITY NOT AFFECTING THE INCOME STATEMENT
13.2.1 Dividends
The table below shows the amount of dividend paid by the TF1 group in respect of previous years, and the amount of dividend in respect of the year
ended December 31, 2012 that will be submitted by the Board of Directors for approval by the Ordinary General Meeting of shareholders to be held on
April 18, 2013.
To be paid in 2013*
Paid in 2012
Paid in 2011
Paid in 2010
115.7
116.0
117.4
91.8
0.55
0.55
0.55
0.43
Total dividend (€m)
Dividend per ordinary share (€)
*
Proposed dividend.
Because the 2012 dividend is subject to approval by the shareholders,
it has not been recognised as a liability in the consolidated financial
statements as at December 31, 2012.
The matching entry for the movement in this reserve during the period is
charged to “Staff costs” in the income statement (see Note 20).
The €102.6 million recorded for “other transactions with shareholders”
represents the 20% interest in the net assets of the Eurosport group
entities, and in the Histoire, Stylía, TV Breizh and Ushuaïa TV theme
channels, acquired by the Discovery Communications group (see
Note 3.1-1, “Change in percentage interest in the Eurosport group
entities and theme channels”).
13.2.3 Share buybacks
13.2.5 Put options granted to minority interests
Under the authorisations granted by the shareholders at the Annual
General Meeting of April 15, 2010 and renewed on April 14, 2011 and
April 19, 2012, the TF1 group repurchased 311,682 of its own shares
for €2.3 million in 2012, with a view to their cancellation. In addition, the
Group cancelled 100,000 treasury shares during 2012 that were already
held at the start of the year.
As part of the renegotiation during 2011 of the shareholders’ agreement
between the TF1 group and the founders of Place des Tendances,
the founders were granted a put option over their 20% interest in the
company.
13.2.2 Share-based payment
132
13.2.4 Change in minority interests
In 2011, this option was valued at €7.2 million on the basis of the
terms of the agreement and the business plan, and recognised in the
TF1 consolidated balance sheet (see Note 14-2, “Fair value of financial
liabilities”). There was no material change in the fair value of this option
during 2012.
4
13.3 CASH FLOW HEDGE RESERVE
(€m)
Reserve at January 1
(1)
2012
2011
5.9
3.6
(2.6)
(3.0)
Change in fair value of new cash flow hedges contracted during the period
(0.6)
3.1
Change in fair value of existing portfolio of cash flow hedges during the period
(0.6)
2.2
-
-
2.1
5.9
Cash flow hedges reclassified to profit or loss during the period
Pre-hedging balancing payment reclassified to profit or loss for the period
Reserve at December 31
(1) Amounts reclassified from equity to profit or loss are recognised as a component of operating profit.
Note 14 Financial liabilities
14.1 CATEGORIES OF FINANCIAL LIABILITIES
The table below shows financial liabilities by category:
Financial liabilities at fair value through
profit or loss
2012 (€m)
Designated
at fair value
on initial
recognition
Held for
trading
Level(1)
Financial
liabilities at
amortised
cost
Total
Non-current debt
-
-
(13.6)
(13.6)
Current debt
-
-
(8.8)
(8.8)
1,687.2
1,687.2
-
0.9
-
0.9
-
-
-
-
0.9
-
0.9
-
-
II
(1) See Note 12-2, “Fair value measurement methods for financial assets”.
Financial liabilities at fair value through
profit or loss
Designated
at fair value
on initial
recognition
Designated
at fair value
on initial
recognition
Non-current debt
-
-
Current debt
-
-
(58.5)
(58.5)
-
-
1,563.7
1,563.7
-
0.3
-
0.3
-
-
2011 (€m)
-
0.3
-
0.3
-
-
Level(1)
II
Financial
liabilities at
amortised
cost
Total
(18.0)
(18.0)
(1) See Note 12-2, “Fair value measurement methods for financial assets”.
133
4
14.2 FAIR VALUE OF FINANCIAL LIABILITIES
Because of their short maturities, the carrying amount of bank overdrafts,
trade and other creditors and current debt is regarded as a reasonable
approximation of their fair value.
The fair value of derivatives is estimated using valuations obtained
from bank counterparties or from financial models generally used in
the financial markets, on the basis of market data as of the balance
sheet date (level II method), except for the transactions described below
whose fair value was determined by reference to level III parameters (as
described in Note 12-2, “Fair value measurement methods for financial
assets”).
p Call option over the equity interest in Groupe AB:
A call option over the equity interest in Groupe AB had been granted to
Groupe AB management; this option was exercisable at any time up to
and including June 11, 2012 at a price of €155 million.
This option represented a financial liability, changes in the fair value of
which were recognised in profit or loss.
As of December 31, 2011, this item was maintained at its original
amount of zero, since there had been no material change in its
fair value. As of June 11, 2012, the fair value of the option was
determined to be €5.9 million; because it had not been exercised, its
expiry generated a gain of this amount, recognised in “Other financial
income”.
p Liabilities relating to commitments to buy out minority interests:
In 2011, TF1 group recognised as a non-current financial liability the
put option granted to the founders of Place des Tendances in respect
of their 20% equity interest in that entity. The fair value of this option
was measured at €7.2 million. As of December 31, 2012 there had
been no material change in the fair value of this option, which is due
to expire in 2016 at the latest.
14.3 BREAKDOWN OF TRADE AND OTHER CREDITORS
(€m)
Trade creditors
Advance payments received
Tax and employee-related liabilities(1)
Creditors related to acquisitions of non-current assets
Other creditors
Audiovisual industry support fund grants(2)
Current accounts with credit balances
Deferred and prepaid income and similar items
(3)
2012
2011
827.6
780.9
5.6
7.9
390.9
369.4
30.1
43.4
408.3
303.8
9.2
7.1
-
-
15.5
51.2
1,687.2
1,563.7
(1) Mainly comprises VAT payable, and amounts owed to employees and social security bodies.
(2) Audiovisual industry support fund grants included in creditors mainly comprise grants awarded by the French National Centre for Cinematography (CNC) to TF1 Films Production, TF1 Production, and TF1
Droits Audiovisuels.
(3) Mainly comprises prepaid income. As at December 31, 2011, this line item included a €27.1 million cash payment received in connection with a claim for reimbursement of CNC taxes; this claim was
accepted by the court of first instance, but was appealed by the tax authorities. In 2012, all avenues for appeal having been exhausted, this payment was recognised in profit or loss (see Note 23, “Other
operating income and expenses”).
Note 15 Net debt
Net debt as reported by the TF1 group comprises the following items:
(€m)
Financial assets used for treasury management purposes
Total cash and cash equivalents
Interest rate derivatives – assets
2011
258.7
35.9
-
-
258.7
35.9
-
-
Interest rate derivatives – liabilities
-
-
Fair value of interest rate derivatives
-
-
Non-current debt(1)
(13.6)
(18.0)
(8.8)
(58.5)
Total debt
(22.4)
(76.5)
Net cash/(Net debt)
236.3
(40.6)
Current debt(2)
(1) Includes €7.4 million arising from the recognition since 2011 of the commitment to buy out the minority interests in Place des Tendances.
(2) For 2011, includes a drawdown of €47.1 million on a Bouygues Relais credit facility.
134
2012
4
Note 16 Provisions
16.1 NON-CURRENT PROVISIONS
16.1.1
Breakdown of non-current provisions
The tables below show movements in non-current provisions during 2012 and 2011:
2012 (€m)
January 1
Charges
Reversals:
used
Reversals:
unused
Changes
in scope of
consolidation,
reclassifications
20.9
3.7
(0.2)
(4.3)
7.2
December 31
27.3
Provisions for:
Retirement benefit obligations
Long service leave
Commitments
Other
TOTAL NON-CURRENT PROVISIONS
8.3
-
-
-
(8.3)
-
10.4
2.0
(0.9)
-
-
11.5
0.4
0.1
-
-
-
0.5
40.0
5.8
(1.1)
(4.3)
(1.1)
39.3
Following a review of the impact of the amendments to IAS 19,
“Employee Benefits”, the TF1 group has changed the accounting
classification of long service leave entitlement, which from January
1, 2012 will be accounted for as a short-term benefit and hence will
2011 (€m)
no longer require a non-current provision. The existing provision as of
January 1, 2012 (amounting to €8.3 million) and the related deferred tax
asset (amounting to €2.1 million) have been reversed via equity.
January 1
Charges
Reversals:
used
Reversals:
unused
Changes
in scope of
consolidation,
reclassifications
22.7
4.4
(0.9)
(2.3)
(3.0)
8.0
1.1
(0.7)
(0.5)
0.4
8.3
13.6
0.5
-
-
(3.7)
10.4
December 31
20.9
Provisions for:
Retirement benefit obligations
Long service leave
Commitments
Other
TOTAL NON-CURRENT PROVISIONS
0.1
-
-
(0.1)
0.4
0.4
44.4
6.0
(1.6)
(2.9)
(5.9)
40.0
Provisions for commitments relate to the risk of loss on audiovisual
assets that the Group has committed to acquire.
16.1.2
Other movements in provisions for retirement benefit obligations include
actuarial gains and losses on these obligations, which are recognised
directly in equity: the amounts involved were a net loss of €7.2 million in
2012, and a net gain of €2.4 million in 2011.
Provisions for retirement benefit obligations
Main actuarial assumptions
2012
2011
2010
2009
2008
Discount rate (Iboxx A10)
3.3%
5.5%
4.6%
4.9%
3.7%
Expected rate of return on plan assets
3.1%
3.4%
3.7%
4.0%
4.0%
Expected salary inflation rate
2.0%
2.0%
2.0%
2.0%
2.0%
Life table
Insee
Insee
Insee
Insee
Insee
The staff turnover rate used in calculating the provision at December 31,
2012 was 6.6%, unchanged from 2011.
A reduction of 50 basis points in the discount rate applied would increase
the obligation by €1.5 million. Under the accounting policies applied
by the TF1 group, the resulting actuarial losses would be recognised
directly in equity.
135
4
Expense recognised in the income statement for retirement benefit obligations
(€m)
2012
2011
Current service cost
(2.7)
(1.4)
Interest expense on the obligation
(1.1)
(1.3)
0.2
0.3
-
-
(3.6)
(2.4)
0.8
(1.2)
(4.4)
(1.2)
0.2
0.2
Expected return on plan assets
Past service cost
Expense recognised
comprising: net change in provisions
comprising: amount recognised in “Staff costs”
Actual return on plan assets
Amounts recognised in the balance sheet for retirement benefit obligations
The amount recognised in the balance sheet for the TF1 group’s retirement benefit obligations breaks down as follows:
(€m)
2012
2011
2010
2009
2008
Present value of obligation
33.0
26.4
27.9
27.5
30.4
Fair value of plan assets
(5.7)
(5.5)
(5.2)
(5.0)
(4.9)
Unfunded obligation provided for
27.3
20.9
22.7
22.5
25.5
Changes in the present value of the retirement benefit obligation
(€m)
Defined-benefit plan obligation at start of period
Current service cost for the period
Interest cost (unwinding of discount)
Benefits paid
Actuarial (gains)/losses
Changes in scope of consolidation
Defined-benefit plan obligation at end of period
2012
2011
26.4
27.9
2.7
1.4
1.1
1.3
(4.4)
(1.2)
7.2
(2.4)
-
(0.6)
33.0
26.4
2012
2011
Changes in the present value of plan assets
(€m)
Fair value of insurance policy assets at start of period
5.5
5.2
Employer’s contributions
-
-
Benefits paid
-
-
0.2
0.3
-
-
5.7
5.5
Expected return on plan assets
Actuarial gains/(losses)
Fair value of insurance policy assets at end of period
Plan assets are in the form of contributions paid into the “Fonds
Club no.1”, a mutual fund denominated in euros and managed by
an independent financial institution. Based on financial information
136
supplied by the fund manager, the gross return was 3.1% in 2012. As of
December 31, 2012, the fund had an estimated fair value of €5.7 million.
4
16.2 CURRENT PROVISIONS
Movements in current provisions during 2012 were as follows:
Reversals:
unused
Changes in scope
of consolidation,
reclassifications
December 31
-
8.3
January 1
Charges
Reversals:
used
10.1
1.0
(2.5)
(0.3)
Litigation and claims: employees
9.3
8.7
(4.1)
(1.2)
-
12.7
Litigation and claims: commercial
15.2
5.0
(2.7)
(2.3)
1.7
16.9
Contractual litigation, claims, and risks
11.7
-
-
-
-
11.7
-
-
-
-
-
-
2012 (€m)
Provisions for:
Litigation and claims: governmental & public bodies
Restructuring
Other
TOTAL CURRENT PROVISIONS
10.3
2.2
(0.4)
(7.2)
(1.0)
3.9
56.6
16.9
(9.7)
(11.0)
0.7
53.5
No material contingent liabilities had been identified as of the date of
preparation of the financial statements.
Provisions for commercial litigation and claims mainly relate to ongoing
disputes with customers, producers and rights-holders.
Provisions for contractual litigation, claims and risks are intended to
cover risks of claims from other third parties with contractual relations
with TF1, including guarantees given by TF1 in connection with
divestments of equity interests.
Following a tax inspection covering 2006, 2007 and 2008, TF1 SA
received a draft reassessment notice from the French tax authorities
in November 2011. The company contested the main points raised in
the notice and exercised its right of appeal. Following discussions with
the tax authorities, an assessment notice was received at the start of
January 2013, the effects of which have been fully recognised in the
financial statements for the year ended December 31, 2012.
Competition law risks
On January 12, 2009, the investigative department of the French
Competition Authority notified TF1 of complaints relating to practices
in the pay-TV sector. One complaint against TF1 was retained, alleging
anti-competitive practices in respect of the exclusive distribution of
some of its pay-TV theme channels.
In a ruling of November 16, 2010 the authority rejected the complaint of
anti-competitive practices on the grounds that the decision to authorise
the CERES deal, under which TF1 had granted these exclusivity clauses,
gave the parties rights which could not be challenged retrospectively.
However, the authority decided to refer some issues back to its
investigative department:
p the definition of the relevant fibre optic and catch-up TV markets;
p whether or not the cumulative effect of these exclusive arrangements
was to block access to the pay-TV market.
In a ruling of September 20, 2011, the French Competition Authority
withdrew its authorisation for the 2006 takeover of TPS by Vivendi and
the Canal Plus group due to failure of the Canal Plus group to fulfil a
number of the commitments made at the time of the takeover. Following
renotification of this transaction, the authority authorised the merger of
CanalSat and TPS on July 23, 2012, subject to compliance with various
injunctions.
The Canal Plus group has appealed this decision to the Conseil d’Etat.
Reversal of this decision, and of the obligations that it imposes on the
Canal Plus group (especially as regards broadcasters of independent
theme channels, such as the TF1 group, could pose a risk to the
business model of these channels when their distribution contracts are
renewed).
There is currently no provision for these risks in the consolidated financial
statements of the TF1 group.
137
4
Note 17 Operating revenues
Operating revenues comprise:
(€m)
2012
2011
1,775.5
1,821.5
Distribution of consumer products
240.2
228.1
Cable and satellite revenue
405.5
381.2
Advertising revenue
Production/distribution of audiovisual rights
Revenue from other activities
Revenue
Royalty income
Operating revenues
71.6
63.4
127.8
125.5
2,620.6
2,619.7
0.4
0.8
2,621.0
2,620.5
Note 18 External production costs
External production costs, which amounted to €772.5 million in 2012
and €702.9 million in 2011, comprise costs incurred on programmes
acquired from third parties and broadcast by TF1 and by the theme
channels, TMC, NT1, HD1, TV Breizh, TF6, Série Club, Stylía, Histoire
and Ushuaïa TV.
Note 19 Other purchases and changes in inventory
This line consists of the following items:
2012
2011
Purchases of services
(€m)
(237.9)
(261.8)
Purchases of broadcasting rights
(142.4)
(104.4)
(38.2)
(41.4)
Purchases of goods
Other items
Other purchases and changes in inventory
(23.7)
(24.7)
(442.2)
(432.3)
Note 20 Staff costs
Staff costs break down as follows:
2012
2011
Staff remuneration
(€m)
(292.3)
(296.6)
Social security charges
(120.1)
(119.6)
Other staff costs
(1.8)
(3.7)
Statutory employee profit-sharing
(9.0)
(11.9)
Share-based payment expense
(0.7)
(1.0)
(423.9)
(432.8)
Staff costs
138
4
Defined-contribution plan expenses are included in “Social security
charges”, and totalled €34 million in 2012 and €33.2 million in 2011.
provisions (see Note 16.1). Lump-sum retirement benefits paid during
the period are recorded in “Staff remuneration”.
Expenses relating to lump-sum retirement benefits and long-service
leave under the collective agreements applicable to TF1 group
companies are recognised as part of the net change in non-current
Share-based payment expense includes the cost of share option plans
and consideration-free share allotment plans, calculated in accordance
with IFRS 2.
20.1 COST OF SHARE OPTION PLANS GRANTED BY TF1
The cost of share option plans recognised in “Staff costs” breaks down as follows:
Staff costs
Date of grant
Lock-up period
Total fair
value
Plan no. 10
March 20, 2008
3 years
2.8
-
0.3
Plan no. 11
March 20, 2009
3 years
1.6
0.1
0.5
Plan no. 12
June 10, 2011
4 years
1.8
0.5
0.2
Plan no. 13
June 12, 2012
4 years
1.0
0.1
-
0.7
1.0
(€m)
2012
TOTAL
2011
The cost of share option plans was computed using the Black-Scholes model and the following assumptions:
Reference
share price
Exercise
price
Expected
volatility
Average
maturity
Risk-free
rate
Payout ratio
Liquidity
discount
Fair value
per option
Plan no. 10
€13.60
€15.35
31%
5.0 years
3.67%
6.25%
-15%
€1.49
Plan no. 11
€5.71
€5.98
49%
5.2 years
2.75%
8.98%
-15%
€0.86
Plan no. 12
€12.40
€12.47
31%
5.25 years
2.61%
4.64%
-15%
€1.18
Plan no. 13
€5.72
€6.17
40%
5.18 years
1.63%
7.65%
-15%
€0.70
The average maturity used is lower than the contractual life of the
option in order to take account of exercises by grantees ahead of the
contractual expiry date. The volatility assumptions used are consistent
with the implied volatility reflected in the price offered at the date of grant
by leading banks for TF1 share options with the same maturity.
20.2 COST OF EMPLOYEE BENEFIT PLANS AWARDED BY THE BOUYGUES GROUP
The cost of plans awarded by the Bouygues group to TF1 employees was not material for 2012.
Note 21 External expenses
External expenses break down as follows:
(€m)
Subcontracting
Rent and associated charges
Agents’ fees and professional fees
Advertising, promotion and public relations
Other external expenses
External expenses
2012
2011
(159.4)
(163.1)
(44.5)
(42.0)
(115.0)
(110.6)
(81.1)
(75.9)
(88.2)
(78.1)
(488.2)
(469.7)
139
4
Note 22 Taxes other than income taxes
This line comprises the following items:
(Rounded to the nearest €m)
Audiovisual taxes
CNC (French National Centre for Cinematography) taxes
2012
2011
(92.4)
(92.4)
(84.2)
(84.1)
Other
(8.2)
(8.3)
Other taxes
(54.6)
(52.8)
Local business taxes
(14.9)
(15.0)
Payroll-based taxes
(15.0)
(14.8)
Other taxes
Taxes other than income taxes
(24.7)
(23.0)
(147.0)
(145.2)
Note 23 Other operating income and expenses
Other operating income and expenses consist of the following items:
2012
2011
Reversals of unused provisions
(€m)
25.4
19.6
In-house production capitalised, and cost transfers
19.1
22.0
0.1
0.9
9.2
14.6
38.5
21.8
Operating grants
Investment grants
Foreign exchange gains
Other income
33.7
8.6
Other operating income
126.0
87.5
Royalties and paybacks to rights-holders
(81.5)
(81.4)
(5.0)
(8.6)
(38.8)
(26.0)
(5.4)
(17.9)
(130.7)
(133.9)
Bad debts written off
Foreign exchange losses
Other expenses
Other operating income for 2012 includes a €27.1 million reimbursement of taxes on television services, all avenues for appeal against this reimbursement
having been exhausted in February 2012.
Note 24 Non-current operating income and expenses
Non-current operating expenses amounted to €47.7 million in 2012, comprising the non-recurring exceptional costs generated by phase II of the
optimisation plan.
140
4
Note 25 Cost of net debt
Cost of net debt breaks down as follows:
(€m)
Interest income
Change in fair value of the hedged portion of the bond issue
Change in fair value of interest rate derivatives
Income and revenues from financial assets
Income associated with net debt
Interest expense on debt
Change in fair value of interest rate derivatives
Expenses associated with net debt
Cost of net debt
2012
2011
0.5
1.4
-
-
-
-
0.1
-
0.6
1.4
(0.6)
(0.8)
-
(0.1)
(0.6)
(0.9)
-
0.5
2012
2011
1.2
1.7
Note 26 Other financial income and expenses
Other financial income and expenses break down as follows:
(€m)
Dividend income
Gains on financial assets
0.2
0.4
Gains arising from changes in value of forward currency purchase contracts
0.1
3.8
Other income
6.1
-
Other financial income
7.6
5.9
Losses on financial assets
(0.1)
(0.4)
Losses arising from changes in value of forward currency purchase contracts
(1.3)
-
Other expenses
(0.4)
(0.4)
Other financial expenses
(1.8)
(0.8)
“Other financial income” includes €5.9 million for the effect of the fair value remeasurement of the equity interest in Groupe AB (see Note 3.1.2, “Inclusion
of Groupe AB in the scope of consolidation as an associate by the equity method”).
141
4
Note 27 Net income and expense on financial assets and financial liabilities
The table below shows income, expenses, gains and losses arising on financial assets and liabilities by category, split between items affecting financial
income/expense and items affecting operating profit:
(€m)
Financial 2012
Financial 2011
Operating 2012
Operating 2011
Net income/(expense) on loans and receivables at amortised cost
0.7
1.5
(16.2)
(25.9)
Net income/(expense) on financial assets at fair value
6.0
0.1
-
-
financial assets designated at fair value through profit or loss
5.9
-
-
-
financial assets held for trading
0.1
0.1
-
-
Net income/(expense) on available-for-sale financial assets
1.2
1.6
-
0.1
Net income/(expense) on financial liabilities at amortised cost
(0.9)
(1.2)
-
-
Net income/(expense) on derivatives
(1.2)
3.6
0.5
(1.2)
5.8
5.6
(15.7)
(27.0)
2012
2011
(73.6)
(94.8)
3.1
6.1
(70.5)
(88.7)
Net income/(expense) on financial assets and financial
liabilities
Note 28 Income taxes
28.1 CURRENT AND DEFERRED TAXES
28.1.1 Income statement
(€m)
Current taxes
Deferred taxes
Income tax expense
The tax rate used in the deferred tax calculation was 36.10% for the
years ended December 31, 2012 and 2011.
142
The tax rate used to measure deferred tax assets and liabilities was
36.10% in the case of temporary differences that are expected to reverse
before December 31, 2014, and 34.43% for temporary differences
expected to reverse subsequently.
4
2012 FINA

4 - Sustainability Disclosure Database

Transcription

Similar documents

January 2014 Newsletter - Fresno Police Department Credit Union

View Report - Financial Center Credit Union

2006 Annual Report

Important Websites - Greater Gateway Association of Realtors

Untitled - Caja Rural Granada

April - GWRRA Maryland Chapter "J"

When your dreams come true

HOW TO GET THERE FROM HERE - The Sullivan Story Presentation

Winter 2014 - Knoxville TVA Employees Credit Union